It is undeniable that the cryptocurrency market is at a stalemate between bullish and bearish sentiments in terms of the short-term outlook. Bitcoin price continues to fluctuate between $31,000 and $30,000 without a clear bullish stance. After consolidating for the past three weeks, experts believe that it is only a matter of time before Bitcoin breaks out in either direction, which should provide a better perspective for the altcoin market.
However, there is another way to look at the market, which is to study the behavior of large stablecoin holders, even if they belong to exchanges.
Stablecoin behavior in relation to Bitcoin price action
According to market intelligence platform Santiment, the top two stablecoins, Tether USDT and Circle USDC, hold a ton of key information for decoding the Bitcoin market. From a fundamental standpoint, decreasing stablecoin reserves are extremely bullish as Bitcoin prices rise, and vice versa, making it easier to predict the outlook for the crypto market.
According to Santiment Stablecoin Research, as Bitcoin has surged recently, whales and sharks have been showing a bullish outlook as supply on exchanges has declined. The report further states that more stablecoins continue to appear on exchanges, which could mean that traders are interested in buying crypto assets.
“Looking at how well the top 10 largest addresses for both assets match up to the overall supply on exchanges, it’s safe to say that the majority of the largest addresses are currently located on exchanges,” Santiment concluded.