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Is Bitcoin Bottom In? This On-Chain Condition Hasn’t Been Met Yet
A Bitcoin on-chain metric still hasn’t formed the same condition as in the previous bottom, suggesting that the current low may not be in yet.
Stablecoin Exchange Inflows (Top 10) Hasn’t Shown Any Spikes Recently
As pointed out by an analyst in a CryptoQuant post, the top 10 stablecoin exchange inflows saw a rise during the July 2021 bottom.
The “stablecoin exchange inflows (top 10)” is an indicator that measures the sum of the ten largest stablecoin transactions that are heading towards exchanges. The metric includes data of all types of stablecoins.
Since the top ten transfers are usually from the whales, this indicator can tell us whether whales are active on exchanges or not.
Usually, investors shift to stables when they want to escape the volatility associated with most other cryptos. Once these holders feel that the prices are right to re-enter these markets, they buy into other coins using their stablecoins, thus providing a buying pressure to them.
When the value of the top 10 stablecoin exchange inflows is high, it means whales could be sending large amounts of stables to exchanges for buying other coins. Such a trend could therefore be bullish for the prices of cryptos like Bitcoin.
Now, here is a chart that shows the trend in this on-chain indicator over the last few years:
Looks like the value of the metric has been muted in recent days | Source: CryptoQuant
As you can see in the above graph, the stablecoin inflows (top 10) to spot and derivative exchanges have been displayed separately, since spot platforms are what investors use for converting their coins.
It seems like when the Bitcoin bottom formed back in July 2021 during the mini-bear period of the time, the spot exchange version of the metric sharply rose up.
This implies that whales participated in some heavy buying during that time with their stablecoin reserves, paving way for a bullish reversal in BTC.
In recent weeks, the top 10 stablecoin inflows to spot exchanges haven’t shown any significant movements, which means whales aren’t providing any significant buying pressure yet.
If the past trend is anything to go by, this could be an indication that the current Bitcoin bottom still hasn’t formed.
BTC Price
At the time of writing, Bitcoin’s price floats around $16.8k, down 2% in the last week. Over the past month, the crypto has lost 18% in value.
The below chart shows the recent trend in BTC:
The value of the crypto seems to have declined during the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Stablecoin Exchange Inflow Mean Hits ATH, Why This Could Be Bullish For Bitcoin
On-chain data shows the stablecoin exchange inflow mean has reached a new all-time high, here’s why this might prove to be bullish for Bitcoin.
Stablecoin Exchange Inflow Mean Has Surged Up To A New ATH Recently
As pointed out by an analyst in a CryptoQuant post, these inflows can be positive for Bitcoin in the long term, but might be bearish in the short term.
The “stablecoin exchange inflow mean” is an indicator that measures the average amount of stablecoins per transaction going into the wallets of centralized exchanges.
As stablecoins are relatively stable in value (as their name already implies) due to them being tied to fiat currencies, investors in the crypto space use them for escaping the volatility associated with most other coins.
Once these holders feel that prices are right to enter back into volatile markets like Bitcoin, they convert their stables into them using exchanges.
Because of this, a large number of these coins moving into exchanges can provide buying pressure for the volatile cryptos, and hence surge up their prices.
Now, here is a chart that shows the trend in the stablecoin exchange inflow mean, as well as the corresponding Bitcoin prices, over the last couple of years:
The value of the metric seems to have been pretty high in recent days | Source: CryptoQuant
As you can see in the above graph, the stablecoin exchange inflow mean has observed some sharp uptrend in recent weeks, and has now set a new all-time high.
This suggests that the average transaction going into exchange wallets is currently carrying larger amounts than ever.
In the chart, the quant has also marked the periods where a similar trend was seen during the last couple of years.
It looks like in both the previous instances, high values of the indicator lead to the price of Bitcoin forming a bottom, and then subsequently observing some uplift.
However, the bullish effect has usually been delayed, suggesting that the current high values would only be constructive for BTC in the long term.
The analyst notes that in the short term, this trend in the stablecoin inflow mean could cause volatility for Bitcoin, thus possibly providing a negative effect to it.
Bitcoin Price
At the time of writing, Bitcoin’s price floats around $20.3k, down 2% in the last week. Over the past month, the crypto has gained 6% in value.
Looks like the price of the crypto has slightly declined in the last few days | Source: BTCUSD on TradingView
Featured image from Traxer on Unsplash.com, charts from TradingView.com, CryptoQaunt.com
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Whales Across These Five Chains Are Heavy On Stablecoins, Should You Be Too?
Crypto whales all across the board have been seemingly taking more conservative positions in stablecoins since the bear market started. This has evolved into larger holdings in dollar-pegged cryptocurrencies which have very low volatility. These digital assets have since become a safe haven for investors who are looking to escape highly volatile tokens but still keep their funds in the crypto market.
Crypto Whales Move To Stablecoins
Usually, there has been a marked increase in the stablecoin holdings of the top Ethereum whales but this trend of moving into stablecoins seems to not be localized to just Ethereum whales alone. Data shows that the holdings of whales across 5 blockchains are increasingly skewing towards stablecoin holdings.
The 5 blockchains in this report are Ethereum, Fantom, BNB Chain, Avalanche, and Polygon, and takes a look at the holdings of the top 1,000 whales. The holdings of the largest whales across all of these chains are mostly in the native tokens of the chain, but stablecoins such as USDT and USDC are increasingly important to them.
For the top 1,000 ETH whales, USDC and USDT currently account for $842 million (26.9%) and $710 million (22.7%) of their holdings respectively. BNB Chain whales leaned even more heavily with BUSD making up 41.19% ($365 million) and USDT making up 16.22% ($144 million) of their holdings.
USDT market dominance at 7.68% | Source: Market Cap USDT Dominance on TradingView.com
Fantom (FTM) whales were more into USDC with 30.75% ($12 million) of their holdings in the stablecoin, and 4.67% ($1.8 million) in fUSDT. Avalanche whales hold 74.2% ($265 million) of their holdings in USDT, and 5.68% ($20.3 million) in USDC. Polygon whales allocated the least to stablecoins with only 6.09% ($19.1 million) held in USDC.
Time To Flee For Safety?
Whale holdings and their investment trends can often sway investor sentiment because it shows what these large holders are thinking about the crypto market. Their recent move to stablecoin holdings shows that they expect the market prices to go much lower in the near future.
This is not strictly out of line given that indicators show that the crypto market has yet to see its bottom. Previous bear markets have seen the prices of digital assets such as bitcoin and Ethereum falling more than 80% each, putting the market bottom of bitcoin at around $13,000.
Given this, and the fact that the market follows the price of bitcoin, if it is not at the bottom, it is a good time to seek safe haven in these digital assets. It helps investors preserve the value of their funds while waiting for better market conditions to start reinvesting.
Featured image from Schroders, chart from TradingView.com
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Trade Activity Shows Ethereum Whales Are Seeking Refuge In Stablecoins
For a while now, Ethereum whales have been moving their coins around. This has been a direct result of the bear market that has caused investors to lose a significant amount of their portfolios. Even now, the crypto market is still being ravaged by declining prices. The result of this has been investors seeking refuge in tokens that do not see a lot of volatility, and Ethereum whales have not been left out of this flight to safety.
Stablecoins Gain Favor
Over the last 24 hours, the trade activity of the top Ethereum whales has shown a big shift towards stablecoins. These whales, who have usually been known to trade across a number of digital assets regardless of their volatility, are taking less risk during this time.
The USDT stablecoin has been the number 1 token by trade volume for these top Ethereum whales. The average volume transacted by the whales came out to $267,328, even higher than the volume for ETH, which was the second-highest by trading volume. USDC featured in third place on this list, with an average amount of $89,180 over this time.
In the same vein, the stablecoins were at the top of the most purchased tokens over this time. USDT naturally led the list, while USDC was in second place. Interestedly, ETH did not take 3rd place as expected because Ethereum whales bought more SRM than ETH over this time period.
ETH price settles above $1,300 | Source: ETHUSD on TradingView.com
On the topic of sales, the whales continued the trend of moving toward stablecoins. ETH was the most sold token over the last 24 hours, most of which had gone to converting ETH holdings into the more stable USDT and USDC.
Ethereum Whales Want Stability
Over the course of 2022, Ethereum whales have moved towards more stable options. While ETH continues to top their holdings, the change in their token holdings shows that these whales are getting ready to weather another bear storm.
The start of the year had seen tokens such as Shiba Inu and FTX Token topping the holdings of these large investors. However, the tide has shifted so much in this regard that the largest token holdings of these whales are now in stablecoins.
Presently, USDC is the largest token holder of the top 100 Ethereum whales at $653.3 million (26.09%). It is then followed by USDT with a cumulative holding value of $575.14 million (22.96%). Shiba Inu still features highly on this list but is a long way from being the largest token held by these large investors.
Given that analysts continue to warn investors that the bottom of the crypto bear market is not in, it is no surprise that these investors are looking for safety. If the bottom happens to be lower than already recorded cycle lows, then there is more pain to come.
Featured image from CryptoSlate, chart from TradingView.com
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