More

    Bitcoin Targets $27K; Here Are Key Factors Driving the Rally


    The market is witnessing a massive flow of funds from stablecoins into Bitcoin.

    Bitcoin (BTC) recaptured the $26,900 price point today for the first time since June 2022. Despite facing rejection at the lofty position, the asset’s rally persists, driven by a mirage of bullish factors, including a massive inflow of funds squeezed out of stablecoins by investors.

    Investors Abandon Stablecoins

    Crypto-focused data analyst James Straten called attention to this growing pattern today, citing data from Glassnode. A Glassnode chart reveals that $7 billion has been drained from stablecoins and sent to BTC in the past 30 days, with up to $16 billion drained in the past 4 months.

     

    This pattern has been triggered by the growing issues surrounding the recent fiascos in the banking sector, including the Silvergate and Silicon Valley Bank implosions. Investors have questioned the stability of fiat-backed stablecoins, which hold their reserves in banks and other regulated financial institutions.

    Recall that USDC recently depegged from the dollar shortly after Circle disclosed that $3.3 billion out of its $40 billion is stuck in the recently-collapsed Silicon Valley Bank. The development further compounded investors’ angst, causing them to move their funds from stablecoins to BTC.

    – Advertisement –

    Moreover, amid these concerns, Binance CEO Changpeng “CZ” Zhao revealed Monday that Binance will convert the remaining $1 billion of the Industry Recovery Fund from stablecoins to BTC, BNB, and ETH, citing “changes in stablecoins and banks.”

    Furthermore, Lookonchain, a blockchain surveillance system, disclosed today that Tether has minted $3 billion worth of USDT on the Tron and Ethereum networks in the past 2 days. Tether was also observed to have sent $135.3 million worth of USDT to an address affiliated with Bastion Trading, which then sent the funds to Binance.

     

    BTC Holders Remain Resolute

    Besides the transition of funds from stablecoins to Bitcoin, another factor supporting the latest rally is the conviction of long-term holders. IntoTheBlock highlighted today that the total amount of BTC owned by addresses holding their assets for at least a year has reached an all-time high.

     

    In addition, an unidentified whale address accumulated 40,141 BTC worth an estimated of $1 billion in a single transaction yesterday, marking the most significant BTC transfer this year. The funds were observed to have been sent from Binance.

     

    Meanwhile, BTC is changing hands at $26,472 as of press time, up by a massive 32.58% in the past week. Consequently, the global crypto market cap has increased by 4.43% in the past 24 hours, currently at $1.13 trillion.

    – Advertisement –





    Source link

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    - Advertisement - spot_img

    You might also like...