In the past two days, institutional investors have ceased their accumulation of stablecoins, leading to a notable decline in Bitcoin's price. As of 08:03 am UTC on August 12, Bitcoin (BTC) has dropped 3.9% to $58,930, falling from a weekly high of $62,510 and slipping below the $60,000 mark.
On-chain analytics platform Lookonchain attributed the drop to a halt in stablecoin buying by institutions. Their post on August 12 noted, “Institutions seem to have temporarily stopped buying, and the price of $BTC dropped 4.5% today! We noticed that institutions stopped receiving $USDT from Tether Treasury and transferring it to exchanges 2 days ago.”
Stablecoins, primarily Tether (USDT), are crucial for converting fiat to crypto, and a reduction in their inflows can signal diminished buying pressure and investor appetite. Tether had previously minted $1.3 billion worth of stablecoins between August 5 and August 9, which was transferred to major exchanges like Kraken, Coinbase, OKX, and Bullish. This influx helped Bitcoin recover from a five-month low of $49,500 on August 5 to over $60,000 by August 9.
Analysts suggest that Bitcoin needs to reclaim the $60,000 level to gain further upward momentum. Rekt Capital noted on August 10, “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, Bitcoin ETFs in the U.S. have seen over $89 million in net negative outflows on August 9, highlighting ongoing challenges in the market.
The future of Bitcoin’s price movement will likely depend on whether institutional stablecoin inflows resume and how the market reacts to the current conditions.
August 2024, Cryptoniteuae