Stablecoins see reduced activity amidst market uncertainty: What now?

was under pressure in the lower timeframes from the bears. The halving and the subsequent retracement might be ending, and the summer could shape up to be a long consolidation phase.Sectors like memes have been the outliers, but overall the trend has been bearish over the past month.

AMBCrypto analyzed stablecoin behavior to understand market participants’ sentiment — are they willing to take risks yet?AMBCrypto analyzed data from CryptoQuant to assess stablecoin usage. The active addresses metric chart above tracks the total number of unique active addresses, both sender and receiver.It had trended higher in February and peaked in early March when the market made strong gains. Just a few days after this peak, Bitcoin managed to push past the $70k barrier.

Its downtrend in recent days suggested reduced interaction and buying and selling activity, which hinted that participants were not bullish.The exchange reserve has consolidated within a range in 2024. It dropped swiftly from the 23rd of April to the 10th of May, showing a pronounced decrease in buying power.This changed on the 13th of May, as a sharp inflow of stables was spotted. Ideally for the bulls, the stablecoin exchange reserve continues to trend higher in the coming days.

On the other hand, a downtrend usually comes alongside a market-wide rally. With USDT.D above the 4.9% support level, it is expected to move higher toward the 5.79% resistance.If it can subvert expectations and drop lower, bulls can take it as a sign that going long is favorable. However, technical and fundamental analysis of the crypto assets in question is still preferred before buying them, rather than relying solely on the Tether Dominance chart.Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis.

Source: News Formal (newsformal.com)

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