Over the weekend, Bitcoin (BTC) pricing struggled to break above $40,000 resistance, and is now trading slightly around $38,000. Whales have begun accumulating more stablecoins at a time when BTC is hanging at a 40% discount from all-time highs.
Stablecoin whales with wallet holdings of 10,000 to 10 million Tether (USDT) have acquired over $1 billion in buying power in the last month, according to statistics from Santiment. According to the research, these whales’ purchasing power surged by nearly 7% in just one month.
The ability of stablecoins to acquire Bitcoin and hence drive its price higher referred to as buying power. When the price of Bitcoin is low, the stablecoin supply is able to acquire a larger share of the circulating BTC supply, leading the price to rise and giving the stablecoin supply more buying power, and vice versa.
Whales’ large stablecoin holdings signal that they are waiting to acquire BTC at a cheaper price, indicating a bullish market view. This sentiment is backed up by the exodus of BTC from exchanges. In the last 26 weeks, there has been a bigger movement of BTC supply away from exchanges than on to it in 21 of those weeks.
One of the reasons for Bitcoin’s current sluggish price trend is its close association with the S&P 500, while gold surged to a multi-week high. The price motion, on the other hand, is very similar to the first half of 2021, when gold outperformed BTC for the first two quarters while BTC maintained a close association with the equity market.
Bitcoin consolidates after $40K surge as analyst eyes weekly higher low for BTC price
