Stablecoins Replenish Bull Market "Ammunition": Two Major Stablecoins Issue $10 Billion in 30 Days
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Stablecoins Replenish Bull Market "Ammunition": Two Major Stablecoins Issue $10 Billion in 30 Days
Stablecoin activity indicates that bulls are preparing for a rebound.
Navigating Web3 tides with focused insightsBy Mary Liu, TechFlow
Bitcoin kicked off the week strongly as the halving approaches, surging above $72,000 in early Monday trading—less than 3% away from its all-time high of $73,750. Market data shows that after trading near $69,400 over the weekend, Bitcoin bulls began pushing higher in the early hours of Monday, breaking past the $71,000 resistance level and reaching a peak of $72,780 shortly after 8 a.m. Eastern Time. At the time of writing, Bitcoin was trading at $71,845, up 3.5% over the past 24 hours.
Other tokens also rose on Monday, including Ethereum (up 8%), meme coin Dogwifhat (up 18%), and Pepe (up 10%).
Data released by Coinshares on Monday showed that digital asset investment products recorded $646 million in inflows last week. Bitcoin-related products remained the focus, attracting $663 million in total inflows, while short Bitcoin products saw outflows totaling $9.5 million for the third consecutive week, indicating slight capitulation among bearish investors.
"Year-to-date inflows have reached a record high of $13.8 billion, significantly surpassing the $10.6 billion seen in 2021," said James Butterfill, head of research at Coinshares.
On-chain analytics firm Santiment noted that ETF trading activity remains robust. "Bitcoin ETF volume has not slowed down even four weeks after BTC broke to new highs. Trading activity across GBTC, IBIT, FBTC, ARKB, BTCO, BITB, and HODL remains notably higher than the turning point observed at the end of February when retail participation began to surge," the company's analysts said.
They added, "High activity levels should continue into the halving on April 19, but it will be interesting to see whether ETF volumes and on-chain transaction activity decline immediately afterward."
Stablecoin Activity Suggests Bulls Are Positioning for a Rally
Markus Thielen, head of research at 10x Research, said that although Bitcoin prices have been consolidating since early March, a resumption of upward momentum may be imminent.
"After turning substantially bullish following January 25, we turned cautious about a month ago (March 8) because forward returns appeared unpredictable based on market technical setups. Trading (crypto) is about risk-reward and knowing when to size up or down. The past thirty days have indeed been a period of sizing down. But that is about to change," analysts said in a market update on Monday.
Thielen pointed out: "Last month, Bitcoin traded within a symmetrical triangle pattern. According to some historical analysis, 75% of such triangle patterns result in continuation (bullish) breakouts and higher prices."
Thielen said stablecoin transaction volume offers better insight into future market direction than focusing solely on ETF flows or futures data.
"Over the past 30 days, we've seen around $5 billion in net inflows into ETFs. More importantly, however, Tether recorded $6.9 billion in net inflows, Circle minted approximately $3 billion, bringing a total of $10 billion in fresh capital entering via stablecoins. While Bitcoin ETF flows grab headlines, stablecoin issuance—twice as large—is likely purely bullish. We recommend paying less attention to Bitcoin ETF flows; instead, watch stablecoin issuers, who are driving this market higher," he said.
Thielen concluded: "Although we expressed concerns about weak ETF inflows, the baton has now passed to stablecoins. Tether recorded a seven-day issuance signal of $2.4 billion—one of the highest since this bull run began—indicating fiat money is accelerating into crypto. With a symmetrical triangle breakout looming, we remain bullish."
Thielen’s analysis suggests the triangle pattern converges around April 18. A bullish breakout could send Bitcoin above $80,000 in the coming weeks. Buying at 69,280 with a stop-loss set at 65,000 appears "appropriate."
Many cryptocurrency traders expect the Bitcoin halving event to be a pivotal moment in 2024, significantly impacting the crypto market. However, analysts at Steno Research anticipate this will be a classic "buy the rumor, sell the news" event. Steno Research expects BTC’s value to surge before the halving but potentially fall below halving-level prices within the first 90 days after the event.
According to data from Alternative.me, with just 11 days remaining until the Bitcoin halving, sentiment across the crypto ecosystem remains in the "extreme greed" zone. The total market cap of cryptocurrencies currently stands at $2.69 trillion, with Bitcoin’s dominance at 52.4%.
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