Bitcoin (BTC) price struggled to overcome $40,000 resistance over the weekend and is currently trading just above $38,000. At a time when BTC is hovering at a 40% discount from all-time highs, whales have started accumulating more stablecoins.
According to data from Santiment, stablecoin whales with wallet holdings of 10,000 to 10 million Tether (USDT) have accumulated over $1 billion in buying power in the past month. The data indicates the buying power of these whales increased by over 7% in just one month.
Buying power is defined as the capacity of stablecoins to buy Bitcoin and thereby driving its price higher. When the price of Bitcoin is low, the stablecoin supply is able to purchase a bigger share of the circulating BTC supply, causing the price to rise, thus buying power is high and vice versa.
The significant accumulation of stablecoins by whales indicates they are waiting to buy BTC at a lower price, showing a bullish outlook for the market. The outflow of BTC from exchanges also supports this sentiment. Out of the past 26 weeks, 21 weeks have seen a higher flow of BTC supply away from exchanges than on to it.
The close correlation of Bitcoin with the S&P 500 has also been seen as one of the reasons behind its current sluggish price momentum, while gold rose to a multi-week high. However, the price momentum is quite similar to the first half of 2021, where gold outshined BTC for the first two quarters while BTC maintained a close correlation with the equity market.
By the mid of the third quarter, BTC broke its correlation with the stock market and rose to new highs, while gold plummeted to new lows.