Recent research shows that there is an inverse relationship between the percentage of Tether (USDT) in exchanges and the price of Bitcoin (BTC).
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Santiment published an analysis that shows that the percentage of USDT held in exchanges is inversely related to the Bitcoin price. In a tweet on May 4th, the firm pointed out that the recent correction is probably Immediate Edge, Crypto Genius, Bitcoin Rush, Bitcoin Billionaire, Bitcoin Capital not a trend reversal in the Bitcoin movement:
„Despite the small correction of $BTC over the weekend, prices are starting to rebound around $9,000 again. According to our metrics, one thing that is still tending in the right direction is the percentage of $USDT in the exchanges. As this chart clearly indicates, there is an inverse correlation between Bitcoin price and USDT supply on the exchanges.
Santiment also explained that, since the percentage of USDT held in the exchanges is decreasing, Bitcoin could go back above $9,000.
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Neither Santiment nor Tether responded to Cointelegraph’s request at the time of publication.
Stablecoins market capitalization grows.As the crypto market experienced a significant drop in mid-March, alternative currencies saw their market capitalizations grow. Still, as Cointelegraph reported at the time, Tether, the largest stablecoin by total market value, gained only about 0.5% in four weeks, while Circle’s USD Coin (USDC) recorded a 40% increase.
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In addition, during the recent increase in Bitcoin’s price to $9,000, Tether issued more than 160 million new tokens in 24 hours in just two transactions.