Bitcoin’s price has taken a sharp dive, falling below the significant $59,000 mark as institutional investors appear to have paused their stablecoin accumulation. Within the past 24 hours, Bitcoin’s value dropped 3.9%, reaching $58,930 as of 08:03 am UTC on August 12, down from its weekly high of $62,510.
This decline is attributed to a noticeable halt in stablecoin purchases by institutions, as highlighted by on-chain analytics platform Lookonchain. The platform noted that institutions had stopped receiving large amounts of USDT from Tether’s treasury and ceased transferring it to exchanges two days prior, which likely contributed to the reduced buying pressure.
Stablecoins like Tether are crucial for the crypto market as they serve as a primary bridge between fiat currency and digital assets. The recent lack of institutional stablecoin inflows suggests a weakened demand for Bitcoin, raising concerns about the immediate market outlook.
Earlier, from August 5 to August 9, Tether minted over $1.3 billion in stablecoins, which was transferred to major centralized exchanges, including Kraken and Coinbase. This inflow coincided with Bitcoin’s recovery from a five-month low of $49,500 to above $60,000. However, the current stall in institutional activity has halted this upward momentum.
To regain its footing, Bitcoin needs to reclaim the $60,600 level, according to popular analyst Rekt Capital. Despite this, the inflows into U.S.-based Bitcoin ETFs remain low, with recent data showing $89 million in net outflows on August 9. The reduced ETF activity could further dampen Bitcoin’s short-term prospects.
The market now watches closely to see if institutional buyers will return, as their participation is crucial for driving Bitcoin’s price back above the critical $60,000 threshold.
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