Since the Bitcoin price broke above the sluggish consolidation below $40,000, market participants have viewed the rally as the beginning of a bull run. This also filled them with a lot of optimism and positive sentiments, which enabled the BTC price rally to mark a new ATH very close to $74,000. This caused a notable drain in the price, which shook sentiments, which fell from being extremely greedy to as low as neutral.
Secondly, the markets again remained relatively stable until the ETH price smashed above $3700, which pushed the BTC price close to $72,000. But before the levels marked the crucial resistance at $4000 and $72,500, the bears again regained dominance and are restricting further upswing. This uncertain behaviour of markets may have made the traders pessimistic about the next price action and as a result, stablecoin accumulation has slowly begun.
The data from Santiment hints towards the possibility of another crypto market retracement as the traders have begun to accumulate USDCoin and Tether. The non-empty stablecoin wallet has displayed a steady rise as the USDCoin wallets have soared by 13.9% and USDT by 15.7% in 2024. Stablecoin adoption has been a key metric for tracking the behaviour and mindset of traders, and the above numbers suggest the traders may be losing faith in the rally.
In such cases, the markets may face a pullback after every small upswing, as has been happening since the start of the year. After the accumulation reaches a peak, the markets are expected to retrace, which may compel the prices of major tokens like Bitcoin & Ethereum to lose most of their gains. However, stablecoin accumulation is still in the early stages and hence, only after it reaches certain levels, the validation of the retracement be expected.
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