Crypto Traders Look Up At Stablecoins At A Turning Point

Crypto Traders Look Up At Stablecoins At A Turning Point

As the cryptocurrency market approaches a turning point, on-chain data from Glassnode reveals that traders are avoiding risk and looking for safety in stablecoins and Bitcoin. There are many factors that are leading to the change in investor and market sentiment.

In a research report, the on-chain analytics company Glassnode hinted that traders are shifting funds to less risky assets, such as stablecoins and BTC. According to technical analysis, altcoins are at a pivotal juncture amid an uptrend and an adverse breakout.

The increase that started in the beginning few months of 2023 began to erode way in April, according to Glassnode’s study of Uniswap and futures trading volumes, with legislative worries and a shortage of liquidity encouraging risk-off attitudes among investors.

Traders Seeking Shelter in Stablecoins

According to the analysis, while it may have appeared that meme coins were to blame for an increase in Uniswap’s trading volume, a deeper examination of the Glassnode’s pools showed that BTC, Ether, and stablecoins made up the great majority of the platform’s trading volume.

Furthermore, a sizable portion of this trading activity was made up of sandwich assaults and bot trading.

According to the report, “The amount of ‘organic’ trading volume on Uniswap could be around for over two-thirds of all DEX activity if we consider that various bots participate in exploitation or sandwich attacks.”

The monthly average trading volumes for Ether futures on centralized exchanges decreased to $12 billion each day from an annual average of $21.5 billion last month.

The fall in futures trading volumes, according to Glassnode analysts, is a hint that “institutional investing activity and liquidity continues to be relatively poor.”

BTC vs. ETH Perpetual Volume Dominance

Corresponding to this, there is a significant difference in market share between Bitcoin BTC perpetual and its Ether counterparts, with Bitcoin dominating by a whopping 65.5%.

The total number of shares of both digital assets in the perpetual swap space was equal in 2022. But over the past 12 months, the trend has drastically changed.

Tether USDT has taken in a sizable chunk of Circle’s USD Coin and Binance USD outflows, bringing the market circulation of USDT to an all-new high of $83.1 billion. Typically, money in the cryptocurrency market moves from the top players, such as Bitcoin and Ether, towards altcoins.

The aforementioned patterns, nonetheless, demonstrate that investor interest is currently shifting away from high-risk altcoins and towards low-risk crypto coins such as Bitcoin or stablecoins.

Identical Price Momentum of Bitcoin Compared to Other Cryptocurrencies

Technically, there was an advance in Bitcoin’s market domination percentage in 2023, indicating the proportion of the market capitalization of Bitcoin in the value of all cryptocurrencies, until hitting resistance at the 48.35% level.

The market should prepare for an altcoins rise concerning Bitcoin if the purchasers of this top cryptocurrency are unable to break out over current resistance.

The upward breakthrough from the triangular formation on the TOTAL2 chart, which represents the market capitalization for the overall crypto industry without Bitcoin, was reversed. As a result, it put the index back into a negative triangle pattern that first began to start in October last year.

Right now, a negative falling triangle pattern with lower peak values along with a $433.39 billion parallel support level is limiting the overall market capitalization of altcoins. If it goes below this point, then selling would most certainly pick up speed.

Altcoins may rise over the coming weeks if purchasers manage to drive them upward by establishing resistance beyond the corresponding support level at $616.35 billion by the end of the next couple of weeks.