What do stablecoin holdings tell us about the market?
The 2020/2021 period required the issuance of large volumes of stablecoins such as USDC and USDT. Which led to an increase in holdings.
He 2020/2021 period look there seems to be a boom in stablecoins US dollar coin from Circle and USDT from Tether, which led to its release in large quantities. Since then, their assets have increased. According to Akashnath S of Ambcrypto, this is the determining factor for bullish growth and halving.
Santiment noted in the publication that Non-empty USDC wallets are up 13.9% and Tether wallets are up 15.7% in 2024. These are impressive numbers, reflecting rapid growth during the latest bull run.
From December 2019, the total number of non-zero USDT wallets grew rapidly for almost three years until October 2022. Since then, this figure has been declining rapidly and has a gradual upward trend.
This bullish trend intensified in November 2023, showing that people outside of crypto were feeling more FOMO and more willing to get involved in crypto than ever before. This is a positive sign for the entire space.
Foreign exchange reserves failed to reflect previous bull run
During period 2020-21fast growing cryptocurrency market required printing huge amounts of USDT and other stablecoins.
The total supply of stablecoins increased from $3.5 billion in February 2020 to $99 billion in March 2022.. Since then, fell to $67 billion due to the market decline the day before to start rising again.
Foreign exchange reserves have reflected supply and have increased slowly over the past 12 months.. It may be necessary to start accelerating to replicate the previous bull trend and keep pace with the next cycle of rapid growth in the cryptocurrency market capitalization if this scenario plays out.
He Tether’s dominance chart showed some similarities to the previous halving. Highlighted with a blue rectangle, At the last halving, dominance fell just over two months after the event, before rising sharply in August 2020..
A Falling USDT Dominance Suggests Bullish Price Action in the Cryptocurrency MarketAnd The growing dominance indicates a flight of investors towards stablecoins and bearish pressure on the market..
If the similarities continue, At the beginning of July, we could see a sharp drop in the entire cryptocurrency market.just over six weeks later.
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