Stablecoin data suggests that traders are preparing for Bitcoin (BTC) price to hit a new all-time high.
According to a report from KuCoin Research, the increase in stablecoin inflows is driven by the upcoming Bitcoin supply halving event, which will occur in seven days.
The report details how Tether (USDT) and USD Coin (USDC) issuance continues to increase, reflecting a further rise in enthusiasm for crypto assets from European and American investors. While Binance USD, True USD (TUSD) and PayPal USD (PYUSD) all saw declines in issuance, the two largest stablecoins by market capitalization have continued to flow into the market.
KuCoin Research analysts wrote,
“The issuance of USDT increased by 5.825 billion in March, and USDC issuance increased by 3.803 billion, showing a significant increase compared to the previous month.”
This increase in stablecoin balances occurred in early March, ahead of Bitcoin hitting all-time highs.
Data from analysts at Glassnode detailed Tether’s USDT registering the highest inflow into exchanges on March 3, rising by 192% from $806.2 million to $2.466 billion on March 5. Note that BTC breached its previous all-time high of $69,800 on March 5.
“During this period, compared to other stablecoins, the correlation between USDT in CEX and BTC’s price was higher.”
A similar scenario seems to be playing out over the last few days, with the total stablecoin balance on all exchanges increasing from $19.7 billion on April 7 to the current value of $20.34 billion, according to Glassnode data. This suggests that traders are preparing to open new positions, expecting Bitcoin to resume its uptrend.
Additional data from CryptoQuant reveals that while stablecoin balances on crypto exchanges increased over the last few days, the number of transactions depositing stablecoins to exchanges also grew over the same period.
In the meantime, the total stablecoin market capitalization grew by 2.8% from $150.42 billion on April 1 to $154.7 billion at the time of publication, according to data from DefiLlama. USDT accounts for more than 69.1% of this value, with a market cap of $107.3 billion.
The growth of stablecoin balances on exchanges and stablecoin market caps have historically been considered good indicators for determining market traders’ positioning.
As determined by KuCoin Research, growing stablecoin inflows to exchanges kickstarted Bitcoin’s rally to all-time highs in March.
“USDT and USDC continue to lead in total issuance and inflows of stablecoins into CEX, helping to push BTC to historical highs.”
Analysts project BTC to surpass $100,000
According to X social network user The Moon, Bitcoin’s current parabolic trend could reach $100,000 by the end of next week.
While The Moon’s projection appeared to be ambitious, analysts at market data tracking firm Santiment corroborated these sentiments, arguing that BTC could soon hit $100,000 if the correlation between crypto and U.S. stocks continues to decrease.
In an April 11 YouTube Video, Santiment’s director of marketing, Brian Quinlivan, observed Bitcoin’s divergence from the S&P 500, a historic bullish signal for BTC.
According to Quinlivan, the longest bull runs over the last 15 years have often occurred when there is little to no correlation between Bitcoin’s price and the S&P 500.
“It doesn’t have to be opposite like this, but if they are moving in their own ways, it's a good sign that we can continue forward and hit those $80,000, $90,000, $100,000 levels that many of the bulls out there are often mentioning.”
Price analysis firm Econometrics asserts that if Bitcoin’s growth after the fourth halving follows the same trajectory as previous cycles, “BTC could go anywhere between $140K and $4.5M per coin.”
“That’s quite the range for sure, but the point is that the lower bound is in the six figures range.”
Whether Bitcoin’s price reaches $100,000 and beyond is something that the market awaits, but it appears that stablecoin inflows reflect market participants’ expectations that BTC will go higher.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.