Whale Stablecoin Buying Power Has Surged Over 7% in a Month: Here’s What It Means

Bitcoin (BTC) price struggled to overcome the $40,000 resistance over the weekend and is currently trading just above $38,000. At a time when BTC is hovering at 40% off all-time highs, whales have started hoarding more stablecoins.

According to data from Sentiment, stablecoin whales with wallets of 10,000 to 10 million Tether (USDT) have amassed over $1 billion in buying power over the past month. The data indicates that the purchasing power of these whales has increased by more than 7% in just one month.

Tether USDT supply distribution source: Santiment

Buying power is defined as the ability of stablecoins to buy Bitcoin and thereby drive its price up. When the Bitcoin price is low, the stablecoin supply is able to buy a larger share of the circulating BTC supply, causing the price to rise, so purchasing power is high and vice versa poured.

Related: Rising Rates, CPI and War in Europe – 5 Things to Watch in Bitcoin This Week

The large accumulation of stablecoins by the whales indicates that they are waiting to buy BTC at a lower price, which shows a bullish outlook for the market. The exit of BTC from exchanges also supports this sentiment. Of the past 26 weeks, 21 weeks have seen a higher flow of BTC supply away from exchanges than into them.

Bitcoin exchange flow balance Source: Santiment

Bitcoin’s close correlation with the S&P 500 has also been seen as one of the reasons for the current price slowdown, while gold hit a multi-week high. However, the price dynamics are quite similar to the first half of 2021, where gold outperformed BTC for the first two quarters while BTC maintained a close correlation with the stock market.

BTC vs XSP vs gold price Source: Santiment

In the middle of the third quarter, BTC broke its correlation with the stock market and reached new highs, while gold fell to new lows.

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