Bitcoin: Which Stablecoin Flow Tells You BTC’s Next Move
Journalist
- Resumption of BTC and ETH flows from exchanges was a sign of accumulation
- USDT dominance chart shows that investors may prepare to take more risk
Bitcoin [BTC] The stock price fell below the bullish base of $40,000 last week but has risen quickly. The January 30 blog post from Santiment on X (formerly Twitter) sheds some light on the situation.
Ethereum [ETH] If certain conditions are met, the rest of the crypto market is expected to continue its upward trend.
Understanding stablecoin movements on exchanges and dominance charts can provide insight into where the market will go next.
Exchange reserves trend
The outflow of Bitcoin and Ethereum from central exchanges is an indication of accumulation. This is a sign of increased self-governance and reduced risk of a sell-off. BTC outflow from exchanges is not a new trend.
The outflow of funds has continued since March 2023. The trend stopped in early December when Bitcoin prices reached $44,000.
Since then, foreign exchange reserves have slowly increased as investors booked profits from BTC’s rise to $45,000. Following the approval of the Bitcoin spot ETF, prices fell below $40,000 and market sentiment changed from greed to neutral.
This week foreign exchange reserves fell again. Tether is also falling. [USDT] Reserves on the stock exchanges are increasing.
The USDT dominance graph might be useful
Investor confidence is evident in the increase in Tether reserves. They are willing to risk their stablecoin capital on altcoins, which could drive up the price of all assets.
A downtrend in the USDT dominance chart would be accompanied by a rally in the entire market. USDT dominance is a measure that indicates USDT market capitalization as a percentage of the total crypto market capitalization.
It is called “dominance”, which is similar to Bitcoin’s dominance.
TradingView: USDT.D Source
In the second half of January, USDT dominance rose sharply as prices collapsed. During times of uncertainty, investors fled the market and this was a sign that they had taken refuge in stablecoins. The trend may have started to reverse.
White Box was a zone that represented resistance in December. It has now become a support. The recent decline in dominance could continue.
If the value falls below 5.88%, the zone will turn into resistance.
Bitcoins: Read Bitcoin Price Prediction [BTC] for 2024-25.
Confidence in the market begins to grow after Bitcoin rises above $43,000. This could lead to a rally in Bitcoin and other sectors of the altcoin markets, as well as Ethereum.
This run could end with a dramatic coin pump, similar to the first few weeks of December.
