Institutional investors have paused their accumulation of stablecoins, leading to a significant drop in Bitcoin’s price below a key psychological level.
Over the past 24 hours, Bitcoin’s price fell by 3.9%, trading at $58,930 as of 08:03 am UTC on August 12, down from a weekly high of $62,510.
The dip below the $60,000 mark appears to be linked to institutions halting their stablecoin buying spree, according to an August 12 post on X by on-chain analytics platform Lookonchain: “Institutions seem to have temporarily stopped buying, and the price of $BTC dropped 4.5% today! We noticed that institutions stopped receiving $USDT from #TetherTreasury and transferring it to exchanges 2 days ago.”
Stablecoin inflows to crypto exchanges are a key indicator of buying pressure and investor interest, as they serve as the primary on-ramp from fiat to crypto for many investors. The recent halt in institutional stablecoin inflows could indicate a temporary lack of appetite for Bitcoin.
From August 5 to August 9, Tether, which issues the world’s largest stablecoin (USDT), minted over $1.3 billion worth of stablecoins, coinciding with a market bottom. This influx of stablecoins was transferred to major centralized exchanges, including Kraken, Coinbase, OKX, and Bullish.
Bitcoin had reached a five-month low of just above $49,500 on August 5 but rebounded by over 21% to surpass $60,000 by August 9. The price could recover above the $60,000 resistance level once large institutional stablecoin inflows resume.
Technical analyst Rekt Capital noted that Bitcoin needs to reclaim $60,600 to sustain its upward momentum, stating in an August 10 post: “Bitcoin is doing all the right things to confirm $60,600 as support so as to position price for a revisit of $65,000+ over time.”
