Cryptocurrency market needs rise of this metric before we will be able to see recovery
There are many factors that directly affect the performance of digital assets on the cryptocurrency market, but the on-chain and market data of Tether stablecoin is one of the most important metrics any crypto trader can use when analyzing the situation on the market.
According to data provided by Santiment, Tether addresses that held from $100,000 to $10 million in the largest stablecoin are nearing three-year lows, which means that the market has lost a massive amount of investors, and there is no real buying power left to push the price of Bitcoin or other cryptocurrencies up.
🐳 #Tether addresses holding $100k to $10m in #crypto‘s largest #stablecoin are nearing 3-year lows, in terms of supply held. If $USDT begins being accumulated again, as we saw in last year’s summer rebound, the buying power increase would be a great sign. https://t.co/saDaoqtT2u pic.twitter.com/m2QzbfQLgR
— Santiment (@santimentfeed) July 7, 2022
The supply held and the capitalization of Tether usually reflect the real flow of funds on the cryptocurrency market. Whenever whales start accumulating Tether, the cryptocurrency market sees a rise in inflows and a subsequent rebound, which is not the case in the current bear market.
Since November 2021, Tether saw a gradual decrease in the percentage of Tether held on whale addresses, which means that a lot of private and institutional investors decided to leave the market after Bitcoin hit the ATH.
It is not as bad as it may seem
Despite the negative dynamics on Tether, the market is not down as much as some investors may think while looking at the performance of Bitcoin or other cryptocurrencies. Previously, U.Today covered that the real outflow from the digital assets industry is nowhere near 70%, as it may seem to look at the performance of the cryptocurrency market.
Reportedly, the real outflow from the industry remains at around 30% if we take into account the fact that investors may have redistributed their funds to stablecoins that are not Tether.