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Whales continue to accumulate stablecoins: What this means for the crypto market

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Whales are accumulating stablecoins

On May 24, analysts at the Santiment platform reported that crypto whales have paused their bitcoin (BTC) purchases and are actively restocking stablecoins, particularly favoring USDC and DAI.

“The number of bitcoins in whale wallets remains virtually unchanged. However, we are observing significant accumulation of stablecoins by large holders, which enhances their future purchasing power.”

According to Santiment, 37% of addresses with balances between $100,000 and $10 million hold USD Coin, while MakerDAO’s Algorithmic Stablecoin DAI holds 39% of these addresses. Binance USD is held by just 6.4% of whales. No data was provided by the platform on USDT, which currently holds the largest market capitalization.

Whales anticipate a market decline

Whales began accumulating stablecoins in mid-April, coinciding with BTC reaching a local high of $31,000. Since then, the asset’s price has dropped by 13.7% to its current levels as large holders have secured their profits.

The current accumulation suggests that major investors are preparing to buy during the next significant market decline. This aligns with the decline in inflows to centralized exchanges, which have reached cycle lows. Typically, a decrease in liquidity is followed by increased volatility. However, whales can also employ stablecoins to fund bitcoin short positions.

Regardless of the intentions of investors with their stablecoins, the stablecoin ecosystem is undergoing significant changes. Tether’s market capitalization continues to break records, while USDC has been losing ground. Notably, a few months ago, after the collapse of the Terra ecosystem and the FTX exchange, members of the crypto community actively criticized the issuer of USDT and called for its abandonment. However, this sentiment shifted after USD Coin briefly lost its peg to the U.S. dollar during the collapse of Silicon Valley Bank.

“The combination of the SVB episode, regulatory actions, and an impending default completely turned the tide in Tether’s favor,” stated Santiment analysts.

Earlier we reported that the new management of FTX is actively working on the restart of the exchange.

Cryptocurrency

Bitcoin Price Analysis: Can BTC Bounce Back to $100K Following 8% Weekly Drop?

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Bitcoin has been navigating an ascending consolidation phase near its critical $108K resistance level, recently encountering a sharp decline.

However, strong support zones suggest a potential for a short-term bullish rebound.

Technical Analysis

By Shayan

The Daily Chart

Bitcoin has undergone an ascending consolidation phase near the $108K resistance region, only to face increased selling pressure and distribution activity from large market participants.

This wave of selling led to a significant 15% decline, with the price finding support around the $90K mark and the middle boundary of a long-standing bullish price channel. These levels represent a critical defense line against further declines.

A rebound from this support could set the stage for a renewed attempt to reclaim the $108K mark. Conversely, a failure to hold it may lead to a deeper correction, with the channel’s lower boundary near $75K serving as the next key level of support.

btc_price_chart_2312241
Source: TradingView

The 4-Hour Chart

On the 4-hour chart, Bitcoin has been consistently trending upward within a multi-month bullish channel. The recent rejection at $108K triggered a sharp decline, bringing the price down to the channel’s middle boundary near $95K, a crucial dynamic support level.

A bounce from this region is anticipated, allowing the price to stabilize and potentially resume its uptrend. However, concerns over a hawkish monetary policy for 2025 may amplify selling pressure, increasing the likelihood of a bearish breakout.

In such a scenario, Bitcoin could face further downside, with $90K as an immediate target and $75K as long-term support.

btc_price_chart_2312242
Source: TradingView

On-chain Analysis

By Shayan

The Bitcoin Long-Term Holder SOPR metric provides valuable insights into market behavior and investor sentiment. Between 2022 and mid-2023, the SOPR remained below 1 for an extended period, indicating that long-term holders were selling at a loss associated with market capitulation.

By mid-2023, the SOPR began trending closer to or above 1, marking the beginning of a recovery. This shift was aligned with a broader market rebound as Bitcoin prices rose, reflecting renewed confidence among investors. The upward trend in SOPR suggested that long-term holders were no longer selling at a loss, a key sign of improving sentiment.

As the market moved into 2024, Bitcoin prices continued to climb, and the SOPR consistently stayed above 1. This shift signified that long-term holders realized profits, but the selling pressure remained controlled.

The stability of the SOPR above 1 highlights sustained confidence among investors, reinforcing that market conditions support continued growth, with a potential for further market expansion.

bitcoin_long_term_holder_sopr_chart_2312241
Source: CryptoQuant
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Cryptocurrency charts by TradingView.

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Cryptocurrency

Dogecoin (DOGE) Price Can Skyrocket by 12,000% If History Repeats

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TL:DR;

  • Dogecoin was once the top-performing cryptocurrency after Donald Trump’s victory, going from under $0.15 to almost $0.5.
  • Although it has lost its momentum, especially in the past week or so, history shows that its most spectacular price surge during this cycle could still be around the corner.
DOGEUSD. Source: TradingView
DOGEUSD. Source: TradingView

Can DOGE Pull a 2021-Like Rally?

Perhaps due to its affiliation with Elon Musk and his upcoming role in Donald Trump’s administration, Dogecoin skyrocketed after the US presidential elections. Its price exploded by more than 200% from its aforementioned bottom to $0.485 on December 8.

After these quite impressive gains, though, DOGE started to retrace but still maintained the $0.4 level. However, that all changed last week when the market-wide crash pushed it south hard. In just a few days, DOGE’s price tumbled by nearly 40% to $0.26.

Although such a massive correction sounds painful, it is not something unheard of for the crypto market, especially in the ever-volatile meme coin sector. Similar enhanced fluctuations have transpired in the past as well, which could actually suggest a more favorable future for DOGE.

Popular crypto analyst Ali Martinez compared the recent crash to similar developments that took place during the bull cycles in 2017 and 2021. In both instances, the largest meme coin surged by triple-digits, retraced by 40-60%, and then shot up by four or even five digits by the end of the respective runs.

Can DOGE Soar Above $10?

Skyrocketing by 5,000% or 12,000% sounds quite bullish, but let’s look at these predictions more realistically. In 2017 and 2021, DOGE’s price was a lot more modest, and posting such massive gains seemed easier, at least on paper.

If the OG meme coin is to surge by similar percentages from now on, its price and market cap would have to go to the stratosphere. For example, a 5,000% increase would put its price at over $13, and the market cap would be at over $1.9 trillion – or bigger than bitcoin’s current one.

If DOGE repeats the 2021 gains, then its price would go all the way up to $31-32, and its market capitalization would be north of $4.5 trillion – bigger than Apple’s.

Although these numbers sound quite far-fetched and history is no indicator of future price performances, this doesn’t necessarily mean that DOGE has peaked during this cycle. Dogecoin is still far away from its all-time high registered in 2021, and many other assets have managed to break their peaks, so DOGE might still have a lot of room for growth.

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Why is the XRP Price Down Today? (Ripple Price Analysis)

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Ripple is navigating a pivotal range between $1.8 and $3, with recent price action highlighting the likelihood of a consolidation phase.

A breakout from this range will likely determine its next significant trend.

By Shayan

The Daily Chart

XRP recently faced rejection at the critical $3 resistance, triggering increased volatility and initiating a sideways consolidation phase. After that, the price found support at the $1.8 level, a key zone filled with demand and buying pressure.

This support region can limit further downward movement and maintain the cryptocurrency within the $1.8-$3 range.

As the price consolidates, a bullish or bearish breakout will determine Ripple’s upcoming trajectory. While this could lead to a sustained uptrend, an unexpected bearish breakdown might trigger a significant liquidation event, causing the price to plummet toward lower levels.

xrp_price_chart_2312241
Source: TradingView

The 4-Hour Chart

During the 4-hour timeframe, XRP consolidates within a descending wedge pattern, which often signals a potential bullish breakout if breached upward.

Currently, the price is testing the wedge’s lower boundary near the $1.8 support level, where increased buying activity is expected.

In the mid-term, Ripple seems likely to continue fluctuating within this pattern, with a bullish breakout aiming to reclaim higher levels near $3. Conversely, a bearish breakdown below the wedge’s lower boundary could initiate a decline, potentially driving the price toward the $1.5 threshold, a crucial support level.

xrp_price_chart_2312242
Source: TradingView
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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