Bitcoin shows ‘strong negative correlation’ with USDt activity: Glassnode
Analysis
Price Impact
HighGlassnode reports a 'strong negative correlation' between bitcoin's price and net flows of usdt to exchanges. specifically, usdt outflows (indicating profit-taking from btc gains) coincide with increases in btc price.
Trustworthiness
HighThe analysis comes from glassnode, a reputable blockchain analytics provider, based on two years of on-chain data.
Price Direction
BearishWhile usdt outflows correlate with btc price increases (bullish), the article states that the 'profit-taking signal now easing as flows turn positive again'. this implies usdt is starting to flow *into* exchanges, which, based on the established negative correlation, would suggest a potential bearish signal for btc or a weakening of previous bullish momentum.
Time Effect
ShortThe correlation is observed over two years, but the current observation about 'easing' profit-taking and flows 'turning positive again' points to an immediate shift in market dynamics that could affect short-term price action.
Original Article:
Article Content:
Turner Wright 2 minutes ago Bitcoin shows ‘strong negative correlation’ with USDt activity: Glassnode A recent analysis shed light on another correlation between the world’s largest cryptocurrency and stablecoin by market capitalization. Listen 0:00 15 News COINTELEGRAPH IN YOUR SOCIAL FEED Blockchain analytics provider Glassnode reported a “strong negative correlation” between Bitcoin’s and USDt’s activity over the last two years. In a Wednesday X post, Glassnode shared a comparison between Bitcoin’s ( BTC ) price and net flows of USDt ( USDT ) to exchanges starting in December 2023. According to the analysis, net outflows of USDT from exchanges coincided with increases in the price of BTC. “During euphoric phases, USDT typically flows out at –$100M to –$200M/day as investors lock in profits,” said Glassnode. “At the $126K peak [in October], net outflows reached >$220M (30D-SMA); A clear profit-taking signal now easing as flows turn positive again.” Source: Glassnode An analysis by Whale Alert in April revealed a distinct correlation between Bitcoin and USDt, with the stablecoin issuer typically minting during bull runs of the cryptocurrency and burning during corrections. The two digital assets remain the first and third largest tokens by market capitalization at about $1.8 trillion and $184 billion, respectively. Related: Bitcoiners are in profit, but beware of short-term fragility: Glassnode Stablecoins and Bitcoin adoption advance amid favorable US regulation In July, the US government passed the GENIUS Act, a law establishing a regulatory framework for payment stablecoins. Tether CEO Paolo Ardoino said that USDt would comply with the law, but also announced in September that the platform would launch a new GENIUS-compliant dollar-pegged stablecoin, USAT. The US government and several states in the country have also made efforts to stockpile Bitcoin as part of a strategic reserve. US President Donald Trump signed an executive order in March directing the creation of a digital asset reserve. Still, reports suggested that the government had yet to enact the plan, which primarily relies on stockpiling seized crypto. Magazine: Getting scammed for 100 Bitcoin led Sunny Lu to create VeChain # Cryptocurrencies # Business # Bitcoin Price # Bitcoin Analysis # Tether Add reaction