Bitcoin saw a sizable price surge this past week, rising over 11% to reach nearly $30,000. According to blockchain analytics firm Santiment, this Bitcoin price boost was fueled in part by the increased accumulation of stablecoins like Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).
The combined market capitalization of these major stablecoins grew substantially, now totaling over $120 billion. This expanded stablecoin market cap provides greater buying power that assisted the push of Bitcoin past the key $30,000 threshold.
Santiment notes that more sustained Bitcoin price rises are likely to materialize when whales continue building up their stablecoin holdings while Bitcoin trades sideways in its current range between $28,000-$32,000. The increased stablecoin reserves will allow larger investors to deploy funds into Bitcoin more easily when market conditions become favorable.
At the time of writing, Bitcoin is trading around $29,800, after briefly reaching $30,000 during the week. This still represents a significant 11% gain over the past 7 days.
Many cryptocurrency market observers view the $30,000 level as an important milestone for Bitcoin. Sustained trading above this psychologically important threshold could reinstate bullish sentiment and confidence that the 2022/2023 cryptocurrency bear market is coming to an end.
The influx of stablecoin capital provides the foundation for potential continued upside in the Bitcoin price. Crypto whales seem to be biding their time, stocking up on stablecoins while awaiting the next major market move. When these wealthy investors do deploy their now larger stablecoin holdings, the upside for Bitcoin could be substantial.
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