The value of Bitcoin (BTC) saw a notable increase over the last 24 hours, yet a complete correction in price remains elusive as it stays under the crucial $60,000 mark.
Monitoring the movement of stablecoins serves as a vital indicator in understanding the overall sentiment of investors towards BTC.
With this in consideration, CryptoCrypto examined a recent report from CryptoQuant, which indicated a decrease in the flow of stablecoins.
USDT Flow in Contrast to BTC’s Subdued Growth
It comes as no surprise that USDT holds a 70% market dominance in the stablecoin realm. Consequently, CryptoCrypto delved into recent investor actions regarding this particular token.
Reviewing the daily price chart, Bitcoin began September on a bearish note, declining by approximately 3% to $57,300 from the previous day. Nonetheless, a significant uptick the following day saw Bitcoin approaching the $60,000 mark.
Interestingly, this rise coincided with USDT inflows doubling from $402 million to $970 million.
As per CryptoCrypto’s assessment, this surge signaled renewed optimism among stakeholders, evident in the increased USDT deposits on exchanges.
Furthermore, this influx potentially fueled the recent upswing, prompting day traders to capitalize on the dip.
Traditionally viewed as a positive indicator, this finding starkly contrasts with the previously mentioned report.
Consequently, CryptoCrypto delved deeper, highlighting that despite the surge in USDT, Bitcoin remained only 0.21% above the previous close of $59,129 at the time of writing.
Market Prudence Reflected in Net Transactions
An analysis of net flows offers deeper insights. Currently, the net flow of USDT stands at a negative $120.8 million, with the trading day still unfolding.
This notable outflow indicates a growing sense of caution among investors.
As per CryptoCrypto’s interpretation of the provided chart, four days ago, a substantial $180 million in Tether was withdrawn from exchanges.
Following this move, Bitcoin witnessed a sharp downturn, closing at $57,700 – its lowest point of the day.
These negative flows do not necessarily imply a strong selling pressure on Bitcoin but do suggest a cautious approach among traders, who might be using USDT to secure profits or await a potential dip for reentry into the market.
Traders Prepare for Deeper Declines Amid Heightened BTC Caution
CryptoCrypto studied the chart below to determine whether traders are preparing for a possible decline or waiting for better profit opportunities.
Based on the 12-hour chart, a significant drop shows 46% long positions versus 54% short positions.
In essence, the prevalence of short positions suggests that traders are anticipating further price declines before considering new long positions.
Should the bulls fail to step in, Bitcoin might retrace towards its previous support level around $57,000 before any potential correction in price.
Nevertheless, if the market remains resilient or unexpected positive news emerges, this could trigger short squeezes, forcing short sellers to cover their positions, potentially propelling Bitcoin above the $60,000 threshold.