Bitcoin Rally Fueled By USD Coin (USDC) Rotating Into BTC: Santiment
February 22 2023 - 11:30AM
NEWSBTC
On-chain data from Santiment suggests the latest Bitcoin rally may
have been fueled by USD Coin (USDC) shifting into the
cryptocurrency. USD Coin Shark And Whale Addresses Have Declined
Recently According to data from the on-chain analytics firm
Santiment, USDC whale and shark addresses have gone down by almost
8% in the last two months. The relevant indicator here is the
“Supply Distribution,” which tells us the total number of addresses
that belong to each wallet group in the market right now. The
wallet groups here are divided based on the number of USDC tokens
that they are holding currently. For example, an address that’s
holding five coins will be included in the 1-10 coins group. If the
Supply Distribution metric is applied to this particular group, it
will measure, among other things, the total number of addresses on
the network whose balances fall inside this coin range. Related
Reading: Small Cap Altcoins Still Crypto Market Kings, Massively
Outperform Bitcoin Now, in the context of the current discussion,
the wallet groups of interest are the ones covering the 100,000-100
million coins range. Here is a chart that shows the trend in the
Supply Distribution data for the three address cohorts that make up
this range over the last few months: Looks like all three of these
groups have registered a decline in recent weeks | Source:
Santiment on Twitter The significance of this coin range is that it
includes two important USDC cohorts called the sharks and whales.
As shown in the graph, the wallet groups that cover these investors
had seen a rapid increase in their total addresses when the FTX
collapse took place back in the November of 2022. The reason behind
this rise was that investors cashed out of cryptocurrencies like
Bitcoin into the stablecoin as the crash occurred. In the last
couple of months, however, the metric looks to have been going down
instead. Related Reading: “Buy The Dip” Mentality Returning To
Bitcoin? This Metric May Suggest So In total, these three wallet
groups have lost around 2,001 addresses, which represents a
decrease of about 7.8%. This suggests that these sharks and whales
have been leaving the stablecoin in this period, possibly for other
cryptocurrencies like BTC. Generally, investors use stables when
they want to avoid the volatility that usually comes with the other
assets in the sector. However, once they feel that the time is
right to jump back into these volatile markets, they rotate back
into their desired coins, thus applying buying pressure to them.
This buying pressure can naturally show up as a surge in the price
of the cryptocurrencies that they have been shifting into. From the
chart, it’s visible that since the USDC shark and whale addresses
have started to trend down, Bitcoin has caught an upwards momentum.
A potential interpretation of this trend can be that the latest BTC
rally has been, at least in part, fueled by the buying pressure
applied by these USDC sharks and whales. Bitcoin Price At the time
of writing, Bitcoin is trading around $24,000, up 6% in the last
week. BTC has registered some drawdown today | Source: BTCUSD on
TradingView Featured image from Jonathan Borba on Unsplash.com,
charts from TradingView.com, Santiment.net
USD Coin (COIN:USDCUSD)
Historical Stock Chart
From Feb 2024 to Mar 2024
USD Coin (COIN:USDCUSD)
Historical Stock Chart
From Mar 2023 to Mar 2024