Relevance up to 07:00 2022-03-09 UTC–5
Over the previous week, investors have been protecting their capitals by diversifying their investment portfolios. Against this background, platinum and palladium reached new all-time highs. Gold also climbed to the yearly high and continues to grow. At the same time, the cryptocurrency industry is staying aside from the interests of investors.
However, stablecoins are an exception as they are pegged to the US dollar. Stable crypto-assets tied to gold are also very popular. But today we want to focus on USD-backed stablecoins. Santiment experts noticed the growth of USDT volumes at major exchange addresses. Over the past month, the total volume of stablecoins in wallets with balances from 10,000 to a million USDT increased by $1 billion.
In other words, over the last month, large capital has accumulated more than 2.5% of the USDT volumes. Mass buying can be attached to mass diversification of investment portfolios, where the main components are instruments directly or indirectly related to the US dollar or precious metals. However, there is a possibility that whales and sharks are preparing to grab Bitcoin at the local bottom.
The altcoin market should be discarded at once because the dominance of BTC at the current stage does not give room for the movement of the alt market. Besides, Bitcoin continues to decline and as of 14:00, it is trading around $39,000. The fall slowed down at $37,200, where a local support zone was formed. It can be assumed that whales are preparing for a further decline of the cryptocurrency to average the price around the local bottom.
With the BTC/USD price falling, the build-up of USDT should be seen as an increase in purchasing power. There is also an outflow of funds from centralized exchanges, indicating that demand for Bitcoin remains intact. Stablecoin accumulation by large holders reveals two key points. The first is that the cryptocurrency is unlikely to fulfill the bear market’s downside potential. Most likely, the asset will be bought when it breaks through the psychological level of $35,000. The opposite dynamics were observed during the recovery of cryptocurrency quotations in the middle of the correction cycle.
The second point is more alarming, and it has to do with the fact that whales want to buy BTC at the most favorable price at least reaching $35,000, which is a psychological point of no return for investors. Moreover, the local bottom at $32,000 is likely to be reached. We can also assume the price dropped to $28,000, where the lower price point is almost in a year and a half. In this zone all BTCs on Michael Saylor’s balance sheet becomes unprofitable, and therefore this boundary is likely to be preserved from breaking through.
Notably, a retest of the local bottom or the formation of a new one can last from a week to a month. Bitcoin has found an important support area at $37,200. Technical indicators have recovered and are signaling an attempt to reverse the trend. The MACD has left the red zone, while the stochastic oscillator and the Relative Strength Index are pointing to an increase in long positions. All these factors indicate that the buying interest near the support of $37,200 is still high. That’s why we should expect a sideways movement with the further attempt to consolidate higher than $40,000 soon. However, this cannot prevent the asset from falling, which is profitable for market makers.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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