Stablecoin whale transactions and Bitcoin prices: The correlation unveiled
The correlation between stablecoins, Bitcoin [BTC], and the broader cryptocurrency market has been evident, suggesting a cause-and-effect relationship.
But the question is- Can we leverage this information to forecast future price movements?
Santiment’s analysis revealed a crucial metric that highlighted the pivotal role of major stablecoins in shaping the broader cryptocurrency market.
Specifically, the analysis of whale transactions—those valued at $100,000 or more—indicates a significant correlation between spikes in stablecoin transactions and corresponding increases in BTC prices.
The correlation was focused on the five major stablecoins by market capitalization: USDT, USDC, BUSD, DAI, TUSD, and USDP.
The observed data clearly illustrates a strong relation between significant Bitcoin price hikes and spikes in stablecoin whale transactions. For instance, on 11 March, Tether [USDT] experienced its most substantial increase, and Bitcoin’s price quickly followed suit.
Source: Santiment
Similarly, on 13 February, a surge in Binance USD (BUSD) transactions led to a brief price recovery. Going back even further, intense stablecoin activity on 10 November (during the FTX crash) marked a local price bottom for Bitcoin in the previous year.
These examples highlight the vital role that stablecoins play in predicting and influencing the movements of the cryptocurrency market.
Current stablecoins move
As of now, there has been no major spike in the whale transaction chart, but there has been a slight increase in USDT whale transactions. Typically, stablecoin whale transactions indicate the movement of significant amounts of money to exchanges for buying purposes.
However, the current uptick in USDT whale transactions
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