Traders Move $4.7 Billion To Stablecoins Amid Crypto Market Uncertainty – Details
2024年9月8日 - 9:00PM
NEWSBTC
The crypto market is experiencing a notable shift in liquidity as
investors acquire massive amounts of stablecoins due to market
uncertainties in the last few months. CryptoQuant analyst with
username Percival has provided more insights into this trend of
capital rotation. Related Reading: Analysts Predict The Start Of
Crypto’s First Ever Secular Bear Market Open Interest In Crypto
Market Shrinks As Stablecoins See Liquidity Influx Following a
rather bearish week, the crypto market has seen an uptick in the
last day with the total market cap rising 2.86% to attain a
valuation of 1.92 trillion. However, on a larger time scale, the
nascent Industry is surrounded by levels of uncertainty resulting
in significant levels of capital rotation among investors.
According to Percival, levels of Open Interest in the crypto market
grew by 54% between May and July with the stablecoin market cap
declining by approximately 80% within the same period. To explain,
Open Interest refers to the total number of outstanding derivatives
(futures/options) contracts that are yet to be settled or
closed. An increase in Open Interest indicates a heightened
trading activity and market interest from investors who are taking
speculative positions on the future price of volatile assets such
as Bitcoin, Ethereum, etc. Therefore, it is normal that a rise in
Open Interest coincides with the movement of liquidity outside of
stablecoins which are seen as safe, low-volatility assets.
However, from July to present September, Percival has observed a
reversal in this trend with Open Interest reducing by 25% as the
total stablecoin market cap rose by $4.7 billion. This development
indicated that traders are moving their liquidity back to safer
assets as they perceive much uncertainty around the crypto
market. Notably, the crypto market has produced significant
levels of instability in the last two months with Bitcoin falling
to around $54,000 in July and even dipping below $50,000 in early
August. The market leader has also begun September in a similar
fashion and is expected to close the month with negative returns
based on historical performances. Related Reading: Bitcoin
Investors Quiver As Accumulation Trend Nears Zero Crypto Bulls
Build Stronger Price Floor Amid Weakening Selling Pressure
According to Percival, the large influx into the stablecoin market
does not only indicate market uncertainty but can also be
interpreted as a positive sign of traders working to establish a
stronger price floor as they perceive a diminishing selling
pressure. Therefore, this trend can be viewed as a defensive
strategy as these market participants wait out potential downturns
before re-entering the market for future gains. At the time
of writing, the total crypto market cap is valued at $1.92 trillion
with Bitcoin holding a 54% market dominance with market shares
valued at $1.15 trillion. The premier cryptocurrency is currently
valued at $$53,860 following an 8.55% decline in the past week.
Featured image from Forbes, chart from Tradingview
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