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According to Santiment’s on-chain analytics, the Dollar Coin (USDC) transfer into Bitcoin may have contributed to the most recent Bitcoin rise.
Data from the on-chain analytics company Santiment shows that whale and shark addresses for USDC have decreased by roughly 8% over the past two months. The “Supply Distribution,” which informs us of the total amount of addresses in each wallet group currently available on the market, is the pertinent indication in this case.
Wallet groups are separated based on the quantity of USDC tokens each group presently holds. For instance, a five-coin address will be under the category of 1-10 coins.
The total number of addresses on the network whose balances fall within this coin range will be measured, among other things, if the Supply Distribution metric is applied to this specific group.
The wallet groups of interest at this time, in the context of the current debate, are those that cover the 100,000–100,000,000 coin range.
The Supply Distribution data trend for the three address groups that make up this range over the previous several months is depicted in the following chart:
This coin range is significant because it comprises the sharks and whales, two significant USDC cohorts. The wallet groups that include these investors had a sharp rise in their total addresses following the FTX crash in November 2022, as seen in the chart.
Investors converted their Bitcoin and other cryptocurrencies into stablecoins when the market meltdown was taking place, which is what caused this spike. The measure appears to have been declining during the past few months, though.
These three wallet groups have collectively lost around 2,001 addresses, or about 7.8%, in all. This implies that at this time, these whales and sharks have been fleeing the stablecoin, maybe for other cryptocurrencies like BTC.
Investors typically utilize stables when they wish to steer clear of the volatility associated with the other assets in the industry. But, they rotate back into their chosen currencies, exerting purchasing pressure on them, whenever they feel the moment is ripe to reenter these volatile markets.
An increase in the price of the cryptocurrencies that they have been converting to can naturally result from this buying pressure. The figure shows that since the USDC shark and whale addresses began to move downward, Bitcoin has gained momentum to the upside.
The current BTC gain may have been powered, at least in part, by the purchasing pressure exerted by these USDC sharks and whales, according to one possible interpretation of this pattern.
As of this writing, the price of Bitcoin is over $24,000, up 6% from the previous week.
