You have to admit, stablecoins aren’t the most exciting part of the crypto industry, especially when there are NFTs and TVLs to marvel at. However, stablecoins are important indicators of bitcoin or alt-related activity and no trader can afford to ignore them.
So what are the stablecoins doing?
In the mood for red
Santiment data showed that whales making stablecoin transactions saw a slight surge even as the market entered the red zone. These may not seem like related points at first, but stablecoin spikes can sometimes help persuade traders to buy.
On April 6th most transactions on that day [worth more than $100,000] were made with USD Coin [USDC], which recorded 7,453 transactions. In the meantime Tether [USDT] saw 6,450 such whale transactions. Considering that Tether’s market cap was roughly $30 billion more than USDC at press time, this is indeed worth checking out.
🐳 #Stablecoin whale transactions have increased slightly as #cryptomarkets have declined. Just as we see spikes in whale transactions near unstable coin price spikes, $USDT, $USDC, $BUSD, $TUSD, and $DAI generally rise during the best buying opportunities. https://t.co/fjwGdjPbRX pic.twitter.com/nTugOgiTpq
— Santiment (@santimentfeed) April 7, 2022
can you hear the whales sing
As expected, USDC saw a small spike in volumes that started about three days ago and continued even just before press time. This is significant as previous spikes occurred near the times Bitcoin rallied.
Source: Santiment
Turning to velocity, we can see that activity with USDC has indeed increased since mid-February, albeit with quite a bit of variability. In particular, note the high spikes around March 4th and March 25th. However, the question is, are users buying or selling?
Source: Santiment
An exchange offer may give us a better indication and in this case it appears to be a sale. We can infer this from an increase in USDC volume returning to exchanges. However, this trend has been dominant since around early December 2021, when the crashes began. One interpretation is that investors abandoned their USDC and brought home bitcoin, ether, or alts to “buy the dip.” And it looks like this is still going on.
Source: Santiment
A bloody drop
More bullish investors were understandably upset when Bitcoin fell below $45,000 – just as many assumed the king coin had finally surpassed its previous resistance level.
Bitcoin might not be the catch of the season, however, as data from Glassnode’s founders showed that investors also appeared to be showing more interest in Ethereum and other alts.
#Bitcoin trading volume decreased by -26% in Q1 2022 (compared to Q1 2021).
Q1 2021 $BTC yield: +103%
Q1 2022 #BTC yield: -1.46%
More money spread across #Ethereum and Altcoins. Read more here 👉 https://t.co/puXlRHCMaK pic.twitter.com/Oe8zgdEDZV
– 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Ninetropic_) April 4, 2022
Given the DeFi potential for these assets, it seems stablecoin whales are far from becoming irrelevant any time soon.
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