The crypto market might be entering another bear market if the supply of stablecoins does not increase, according to a report by CryptoQuant. The current state of the crypto market has seen its total cap grow 0.99% over the past 24 hours—from $1T on Friday to $1.05T today (May 25).
Will a bear market happen in the coming months?
During the Covid-19 crisis, stablecoins were up, leading to the crypto bull market. However, this supply went down last February and caused a bear trend across all markets.
In a statement, the firm said that recent increases in stablecoins have caused BTC prices to rise. It also warned about a possible repetition of last month’s ‘dead cross’ pattern.
Tether’s Rapid Expansion – Is it Sustainable?
Tether, the leading stablecoin, reached a new two-month high after increasing around 4%. This is the highest Tether has been since its value plummeted following news of investigations into fraudulent activity by Bitfinex and Tether.
NYDIG data shows that in the past 30 days, HUSD has had a trading volume of more than 980 billion dollars. Compared to BUSD’s 323 billion and UDC’s 135—the growth can be attributed to growing positivity among industry experts (and investors!) as well as capital flow boosts.
Supply growth followed a similar pattern to the 2019 rally, which saw BTC grow from $3,250 (January 1) to more than $13,000 in the year’s first half before retracing. Notably, Tether’s supply ballooned from August to January of last year—around the same time that BTC surged 130%.
Bold BTC Hodlers Remarkably Unfazed by Market Fluctuations
According to Glassnode data, the supply of bitcoin has continued even as the markets recovered from their lows last year. The percentage of bitcoins that remained in wallets for five years or more recently hit an all-time high of 27.85%.
Blockchains 5+ years old have a low percentage of their supply still active.
Meanwhile, bitcoin’s price fell below the $23,000 support level over the past day. It lowered around $22,519 before rebounding to close back above $23k.
The bitcoin price hit a high of $23,951 before falling below the 23.6% Fib retracement level to trade at $22,519. It has since recovered slightly and is now switching between those two levels with an average price of $$23000.
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