Bitcoin price drops below $59K as institutions stop buying stablecoins
Institutional investors have halted their accumulation of stablecoins over the past two days, leading to a drop in Bitcoin’s price below a key psychological level.
During the past 24 hours, Bitcoin ( BTC ) price fell 3.9% to trade at $58,930 as of 08:03 a.m. in UTC, falling from a weekly high of $62,510.
The drop below the $60,000 mark was likely caused by institutions stopping their stablecoin buying frenzy, according to onchain analytics platform Lookonchain’s Aug. 12 X post :
“Institutions seem to have temporarily stopped buying, and the price of $BTC dropped 4.5% today! We noticed that institutions stopped receiving $USDT from # TetherTreasury and transferring it to exchanges 2 days ago.”
The lack of institutional stablecoin inflows to crypto exchanges can signal a lack of buying pressure and investor appetite for the underlying asset, as stablecoins are the main on-ramp from the fiat to the crypto world used by investors.
Related: Bitcoin as a US reserve asset is ‘great for price’ but poses significant risks — Charles Hoskinson
Tether’s previously minted $1.3 billion marked the local bottom
Tether, the issuer of USDT ( USDT ) — the world’s largest stablecoin — has minted over $1.3 billion worth of stablecoins from the market bottom on Aug. 5 until Aug. 9.
The $1.3 billion was transferred to some of the most popular centralized cryptocurrency exchanges, including Kraken, Coinbase, OKX and Bullish.
Bitcoin price bottomed at a five-month low of above $49,500 on Aug. 5 and staged an over 21% recovery to above $60,000 by Aug. 9.
Bitcoin price could stage a recovery above the $60,000 psychological resistance once large institutional stablecoin inflows resume.
Related: Wen Lambo? Lamborghini answers with new Animoca Web3 partnership
Bitcoin needs to reclaim $60,000 for more upward momentum: analyst
In terms of technical analysis, Bitcoin price needs to reclaim $60,600 for the next leg up, according to popular analyst Rekt Capital, who wrote in an Aug. 10 X post:
“Bitcoin is doing all the right things to confirm $60,600 as support so as to position price for a revisit of $65,000+ over time.”
However, inflows from the US spot Bitcoin exchange-traded funds (ETFs) remain low. The US Bitcoin ETFs saw over $89 million worth of net negative outflows on Aug. 9, according to Farside Investors data .
ETF inflows can significantly contribute to a cryptocurrency’s price appreciation. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
Magazine: How Chinese traders and miners get around China’s crypto
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Navigating Crypto Volatility: How Bitcoin and Altcoins Influence Your Trading Choices
Understanding the Impact of Market Volatility on Crypto Trading: A Look at the Risk and Reward in Bitcoin and Altcoins

Bitcoin Plunge Signals Opportunity to Buy as USDT Flow Peaks in Six Months
Analyzing Stablecoin Spikes amid Bitcoin's Decline: A Sign of Impending Rally or a Word of Caution?

Keeping Faith in Bitcoin: Unraveling the 2017 Cycle and the Power of HODLing Strategy
Identifying Parallels Between BTC's Current Trends and Its Performance Four Years Prior - Should Investors Hold Firm or Alter Approaches?

Fantom’s Solid Pattern of Higher Lows: What’s Next for FTM Price?

Trending news
MoreCrypto prices
More








