Editor's Note: This article comes fromLongHash Blockchain Information (ID: Kyle Torpey), Author: LongHash Joseph Young, reprinted with authorization by Odaily.
Editor's Note: This article comes from
LongHash Blockchain Information (ID: Kyle Torpey) LongHash Blockchain Information (ID: Kyle Torpey) Currently, more than $1 billion is parked in two major stablecoins, USDT and USDC, as investors wait for a more opportune time to buy into other crypto assets. "The balance of stablecoins USDT and USDC on the exchange has exceeded 1 billion US dollars. This is an indicator to measure how many funds in the exchange choose to wait and see or place limit orders, and then wait for the best time to buy," TokenAnalyst Ankit Chiplunkar, head of the study at . However, in the long run, the option to temporarily hold more than $1 billion in stablecoins is a good sign for the eventual revival of the crypto market. After all, keeping your money in a stablecoin is more optimistic than getting out of the market entirely. Stablecoin data suggests investors are ready to put money back in when crypto markets stabilize, and may be waiting for another drop in bitcoin prices before taking action. secondary title Demand for Stablecoins, Declining Trading Volumes Suggest Lack of Buyers Specifically, we can observe the trading volume of futures and spot. Futures volume refers to the daily volume of futures trading platforms, such as OKEx, Huobi, Binance Futures, BitMEX, FTX, and Bybit. These exchanges allow users to trade with leverage or borrowed capital, but doing so is riskier. Spot volume comes from exchanges that primarily handle fiat-to-crypto and stablecoin-to-crypto pairs. Binance, Coinbase, Kraken, Bitstamp, and Bitfinex account for 83% of the spot market’s daily volume, with an estimated $1.3 billion in daily volume across these exchanges as of this writing. In technical analysis, an asset price rise that is not backed by rising volumes is considered a weak rally or a fake move, often followed by a larger correction. Uncertainty surrounding global equity markets and a general lack of demand for risky assets could lead to a prolonged rest period for crypto assets. secondary title Why Investors Expect Crypto Markets to Head Lower in the Short Term LongHashFrom a historical perspective, whenever Bitcoin falls, it tends to remain on a downward trend for a period of time. For example, in December 2018, when Bitcoin price generally fell to $3150 on major exchanges, it took more than 4 months to completely break out of the $3000 to $4000 range.What does it mean for investors to dump Bitcoin and buy stablecoins? That's not a bullish sign, at least in the short term. As of March 3, the funds in USDT and USDC on the exchange were only 400 million US dollars. The total balance quickly increased by 150% in less than four weeks.
Trading volumes on futures and spot exchanges have been relatively stagnant since mid-February. This suggests that overall buying demand for crypto assets has not increased over the past two months, regardless of market capitalization. Despite the rise in the price of Bitcoin, the data suggests that the number of buyers in the market has not really increased, making a long-term rally for the crypto asset impossible.
