Compass Investments

Crypto vs. Dollar

📌 Amid market uncertainty, stable coins are losing their appeal. What’s next?

In recent weeks, there has been a decline in activity in the stable coins market, indicating that market participants are cautious and reluctant to actively invest in cryptoassets. The dominance graph confirms this trend, reflecting the lack of enthusiasm among investors. Cryptocurrency

– In recent weeks, there has been a decline in activity in the stable coins market, indicating that market participants are cautious and reluctant to actively invest in cryptoassets. The dominance graph confirms this trend, reflecting the lack of enthusiasm among investors.

Bitcoin, the leading cryptocurrency, has recently been under pressure from bears on the lower timeframes. After a sharp drop and subsequent rebound, a consolidation period in the summer is possible, which means there is no clear direction in the market. This uncertainty extends to the altcoin market, where bearish dynamics have prevailed in recent months.

Experts from AMBCrypto analyzed the behavior of stablecoins to understand the mood of market participants and assess their willingness to take risks. The analysis of CryptoQuant data shows a decrease in the activity of stablecoin-related addresses since mid-April. The 7-day moving average of active addresses has a downward trend, indicating a decrease in interaction and buying and selling activity.

Moreover, the dynamics of the exchange-traded stablecoin reserve indicates a decline in the purchasing power of stablecoin holders. The reserve consolidated in a range from late April through mid-May, indicating investors’ reluctance to spend their stable coins to buy cryptoassets. However, on May 13, a sharp inflow of stablecoins was seen, which could indicate a potential shift in sentiment in favor of a bull market.

Analysis of Tether (USDT) dominance shows that market participants prefer to keep their funds in stable coins, avoiding risk. The upward trend in this metric indicates investors’ caution and their reluctance to actively invest in more volatile crypto assets.

Thus, in general, the behavior of the stable coin market indicates participants’ caution and lack of bullish sentiment. The decline in address activity and purchasing power of stablecoin holders indicates a reluctance to take risks. However, a sharp inflow of stablecoins on May 13 may be a harbinger of a change in trend and growth of the cryptocurrency market in the coming days. The key factor will be the dynamics of the exchange reserve of stable coins and the willingness of investors to transfer their funds to more risky assets. So far, market participants prefer to stay on the sidelines, waiting for clear signals and reducing activity in the market of stable coins.

Bitcoin

Bitcoin

$66,840.49

BTC -0.01%

Ethereum

Ethereum

$3,083.03

ETH 0.15%

Binance Coin

Binance Coin

$569.76

BNB -1.48%

XRP

XRP

$0.51

XRP -0.60%

Dogecoin

Dogecoin

$0.15

DOGE 0.79%

Cardano

Cardano

$0.46

ADA -1.66%

Solana

Solana

$176.90

SOL 4.51%