Tether & USD Coin Hold The Key To Crypto’s Future: Santiment Report

In a world obsessed with Bitcoin’s every move, traders may be missing out on some crucial signals from stablecoins, specifically Tether (USDT) and USD Coin (USDC). According to a recent insights report from Santiment, these two stablecoins have historically provided valuable correlations that can hint at market-wide movements before they occur.

While Bitcoin continues its price dance between $29.7k and $31.1k, stablecoins quietly hold potential clues about the future direction of the crypto sector. Santiment highlights several key metrics that traders should keep a close eye on.

One such metric is the Mean Dollar Invested Age, which serves as a “validator” metric. When this line starts to decline, it suggests that an upswing in crypto markets is being validated by previously dormant coins entering the market, potentially driving prices even higher in the future.

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Notably, the movement of older coins that have been sitting idly in wallets, particularly within top stablecoins, is a positive indicator. It indicates that these coins are being moved to buy other cryptocurrencies.

Absolute Holdings of Wallets: Tether’s Sharks & Whales

Another metric of interest is the absolute holdings of wallets holding $100k to $10m worth of stablecoins. This range is often scrutinized to assess the behavior of major stakeholders, or “sharks and whales.” When stablecoins are being exchanged for Bitcoin while its price rises, it indicates a bullish sentiment. 

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Conversely, when stablecoins are increasing while BTC prices decline, it suggests large stakeholders are selling off their cryptocurrencies and returning to stablecoins, signaling a bearish sentiment.

Monitoring the supply of stablecoins on exchanges as a percentage of the total supply is another critical metric. Rapid movements of Tether (USDT) and USDC supplies to exchanges have historically foreshadowed upcoming crypto price movements, as witnessed with USDC in March prior to market-wide price surges.

Additionally, analyzing the supply held by the top exchange addresses provides valuable insights. Comparing the top 10 largest addresses for both Tether (USDT) and USDC with the overall supply on exchanges reveals that most of the largest addresses are currently situated on exchanges.

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While stablecoins may not be the most thrilling aspect of the crypto world, anomalies in these metrics can be vital signals for traders seeking alpha opportunities. Staying attuned to these indicators could present lucrative chances to profit while others remain oblivious to these often-overlooked insights.

Related Reading | Polygon’s MATIC Sparks A Mini Bull Run With 30% Price Jump

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