After wiping bullish hopes, Bitcoin price went under a solid bearish consolidation range due to the rise of regulatory concerns in the market. Although the present regulatory climate may appear to be an obstacle for the cryptocurrency market, recent trends suggest that some investors are shifting their funds from altcoins to Bitcoin. This shift may be attributed to Bitcoin being the only cryptocurrency classified as a ‘commodity’ by the SEC chair. As a result, Bitcoin’s market share has increased exponentially in the last 24 hours as it heads toward the $25K level, indicating a rise in its dominance over other cryptocurrencies. As BTC price made headlines recently when it experienced an exponential surge in value within a single day, it left experts scratching their heads, trying to figure out what could have triggered such a dramatic increase in price. However, the on-chain analytic firm Lookonchain has shed some light on the situation. According to the analysis, billions of dollars in USDC (a stablecoin pegged to the US dollar) flowed into various exchanges, ultimately driving up Bitcoin’s price.
Massive USDC Movements In The Crypto Market
The remarkable surge in Bitcoin’s price in a single day caught many off guard, particularly since February has traditionally been a sluggish month for the leading cryptocurrency. However, within a 24-hour period, the price of BTC climbed by $1,820, marking its most significant daily gain in the last six months.
The recent surge in Bitcoin’s price has been attributed to various factors, such as an increase in the value of the dollar and a decline in inflation. However, on-chain data suggests that the sudden price momentum can be traced back to an anonymous transfer that began injecting money into the cryptocurrency market on February 10th.
As per Lookonchain’s data, institutional funds worth nearly $1.6 billion have flowed into the crypto market over the past six days. A significant proportion of this fund came in the form of stablecoins, with Circle’s USD Coin being the most popular choice. The owner of the funds withdrew their USDC from Circle and subsequently sent it to different exchanges.
Since February 10th, the movement of funds from Circle to multiple exchanges has been observed through three significant wallet addresses. The first wallet, starting with “0x308F,” withdrew 155 million USDC from Circle and transferred it to exchanges. The second wallet, starting with “0xad6e,” withdrew 397 million USDC from Circle and also sent it to various exchanges. Finally, the third wallet, beginning with “0x3356,” withdrew a staggering 953.6 million USDC from Circle and moved it to exchanges within the same time period.
BTC Price Surge Came After Hitting First-Ever Weekly Death-Cross
The surge in Bitcoin’s price occurred only a few days after the top cryptocurrency experienced its first-ever weekly death cross. A death cross is a chart pattern that emerges when an asset’s short-term moving average, typically the 50-day, falls below its long-term moving average, usually the 200-day. Although the pattern is generally regarded as bearish, it has been followed by higher-than-average short-term returns in recent years.
The crypto markets were affected by the Federal Reserve’s increase in interest rates to combat inflation. Furthermore, Bitcoin is highly linked to equity markets, particularly the technology-focused Nasdaq index, which has seen a 16% increase year-to-date. Despite this, Bitcoin has outperformed the index, with a 49% increase this year.
The response to this astronomical surge in the BTC price from the crypto community was diverse, with advocates of Bitcoin considering it to be the beginning of another bull run. However, Samson Mow, an architect at El Salvador’s Bitcoin Bonds, said, “BTC price is still below the 200 WMA, which is 25k. Bitcoin Loophole trading below the 200 WMA is an anomaly.” Bitcoin’s price has typically bottomed out around the 200-week moving average throughout its significant market cycles.
However, a few others referred to the recent price surge as a bear trap and cautioned that significant players were taking profits by selling their holdings.
