BTC Demand Surges in the US Despite Market Turbulence, Large Holders Remain Steadfast
Bitcoin and Ethereum, the world’s two largest cryptocurrencies, experienced a sharp drop in prices last week, reaching their lowest levels in two months. This sudden decline in value was triggered by the instability of several US banks that are connected to the cryptocurrency industry, such as Silvergate, Silicon Valley Bank, and Signature Bank.
The drop in value of stablecoins like USDC and DAI, caused by the instability of these banks, led to an increase in their exchange reserves. This indicated that users were trying to sell their holdings. However, the announcement of the Bank Term Funding Program by the Fed, which would provide additional funding to banks, helped stabilize the value of stablecoins, enabling them to recover their peg to the $1 mark.
The recovery plan announced by the FDIC, Fed, and the Treasury Department had a positive impact on BTC and crypto prices, which coincided with a decrease in 2-year and 10-year treasury yields in the US. BTC found support at the 1-month to 3-month realized price before rallying toward $26k. Despite the sell-off, large BTC holders did not sell their coins, and demand for buying BTC spiked in the US.
Taking an on-chain perspective, it appears that BTC’s value was supported at the 1-month to 3-month realized price of $19.5k before it started to rally toward $26k. Moreover, despite the temporary sell-off, large BTC holders, also known as BTC whales, did not sell their coins, and their spending remained relatively low.
In the US, there was a surge in demand for buying BTC, as demonstrated by the Coinbase premium reaching its highest level since the Covid-19 crash in March 2020. Following the recent rally, Bitcoin’s MVRV ratio, which is considered an essential factor in a bull market, went above its 365-day moving average.
Overall, despite the recent market turbulence, BTC’s on-chain indicators show that its value is supported and that the demand for buying BTC remains strong. The recovery of stablecoins and the announcement of the recovery plan by the FDIC, Fed, and the Treasury Department have had a positive impact on BTC and crypto prices, leading to increased investor confidence in the cryptocurrency market.
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