Key Points
- Stablecoin data indicates traders are expecting Bitcoin’s price to reach a new all-time high.
- Increased issuance of Tether (USDT) and USD Coin (USDC) suggests growing interest in cryptocurrencies from European and American investors.
The data from the stablecoin market hints at traders getting ready for a new all-time high for Bitcoin (BTC). KuCoin Research reported that the rise in stablecoin inflows is propelled by the impending Bitcoin supply halving event, scheduled in seven days. The report highlighted that issuance of Tether (USDT) and USD Coin (USDC) continues to grow, indicating heightened interest in cryptocurrencies from investors in Europe and America.
Stablecoin Inflows and Bitcoin’s Price
Despite Binance USD, True USD (TUSD) and PayPal USD (PYUSD) experiencing a decrease in issuance, the two largest stablecoins by market capitalization, USDT and USDC, continue to enter the market. KuCoin Research noted that the issuance of USDT increased by 5.825 billion in March, while USDC issuance rose by 3.803 billion, marking a significant surge compared to the previous month.
The increase in stablecoin balances happened in early March, right before Bitcoin reached all-time highs. Glassnode reported that Tether’s USDT registered the highest inflow into exchanges on March 3, increasing by 192% from $806.2 million to $2.466 billion on March 5. It’s noteworthy that Bitcoin broke its previous all-time high of $69,800 on March 5.
Current Market Trends
In recent days, a similar scenario seems to be unfolding, with the total stablecoin balance on all exchanges rising from $19.7 billion on April 7 to the current value of $20.34 billion. This suggests that traders are preparing to open new positions, expecting Bitcoin to continue its upward trend.
CryptoQuant data also revealed that while stablecoin balances on crypto exchanges have increased in recent days, the number of transactions depositing stablecoins to exchanges has also grown over the same period.
The total stablecoin market capitalization increased by 2.8% from $150.42 billion on April 1 to $154.7 billion at the time of publication, according to DefiLlama data. 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 are often considered reliable indicators for determining market traders’ positioning.
KuCoin Research concluded that the growth of stablecoin inflows to exchanges triggered Bitcoin’s rally to all-time highs in March. They stated, “USDT and USDC continue to lead in total issuance and inflows of stablecoins into CEX, helping to push BTC to historical highs.”
Bitcoin Price Projections
According to a user on the X social network, The Moon, Bitcoin’s current parabolic trend could reach $100,000 by the end of next week.
Market data tracking firm Santiment echoed these sentiments, suggesting that BTC could soon hit $100,000 if the correlation between crypto and U.S. stocks continues to decrease. Santiment’s director of marketing, Brian Quinlivan, highlighted Bitcoin’s divergence from the S&P 500, historically a bullish signal for BTC.
Price analysis firm Econometrics suggested 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.”
Whether Bitcoin’s price will reach $100,000 and beyond is yet to be seen, but the inflow of stablecoins seems to reflect market participants’ expectations of Bitcoin’s price rising.
