Recent data on stablecoin inflows may indicate that traders expect bitcoin to soon surpass its previous all-time high. This expectation is supported by a significant increase in the issuance of stablecoins such as tether (usdt) and usd coin (usdc), which increased by 5.825 billion and 3.803 billion respectively in March. What does this increase mean for the price of crypto?
Stablecoin issuance rises despite declines in others
While usdt and usdc saw a rise, other stablecoins such as binance usd, true usd (tusd) and paypal usd (pyusd) saw a decline. The increase in stablecoin transactions is closely related to major bitcoin price movements.
According to data analytics firm Glassnode, there was a 192% increase in USDT inflows to exchanges from $806.2 million on March 3 to $2.466 billion on March 5, coinciding with Bitcoin breaking its previous high of $69,800.
Investors are preparing for a bitcoin rise
Recent trends show that this situation will continue. The total balance of stablecoins on exchanges has grown from $19.7 billion on April 7 to $20.34 billion today, suggesting traders may be bracing for another bitcoin price surge. At the same time, the total market capitalization of stablecoins increased by 2.8% from $150.42 billion in early April to $154.7 billion, according to data from DefiLlama, with usdt representing more than 69.1% of this market value.
Experts predict high prices for bitcoin
These patterns of growth in stablecoin balances and market capitalization on exchanges have historically been reliable indicators of market sentiment and traders’ positioning for potential bitcoin price movements.
The optimistic outlook is further supported by several analysts. A notable prediction from a social media user called The Moon suggests that bitcoin’s current parabolic trend will allow it to reach $100,000 by the end of next week.
In this video, I explain why the current #Bitcon parabola can reach $100,000 by next week!https://t.co/HmkYrtoQ50
— The Moon (@TheMoonCarl) April 11, 2024
While ambitious, this prediction echoes the sentiments of market data tracking company Santiment, whose marketing director, Brian Quinlivan, observed a significant divergence between bitcoin and the S&P 500. According to Quinlivan, such a disconnect has heralded the longest bull run historically, pointing to potential for bitcoin to reach levels of $80,000, $90,000 and even $100,000.
Source: https://bitcoinmagazine.nl/nieuws/stablecoins-wijzen-op-all-time-high
