- Bitcoin survived the 13th largest capitulation in the financial market
- Tether Treasury also brought $1.3 billion USDT to the exchanges
This week’s Bitcoins [BTC] market crash, at the time of writing, ranked as the 13th largest capitulation event in global financial history. This is an important milestone no matter how you look at it, because as cryptocurrencies evolve within the broader financial system, bigger downturns are likely.
However, to its credit, the crypto sector recovered strongly. After hitting new monthly lows, the market recovered, with top digital assets such as Bitcoin and Ethereum rising more than 20% on the charts.
In fact, the entity’s adjusted realized loss data showed that Bitcoin recovered from the crash, with its current value now exceeding $1.3 billion.
Source: Glassnode
USDT$1.3 billion on exchanges
The recent Bitcoin crash on August 5 prompted Tether’s Treasury to transfer $1.3 billion USDT to exchanges. This influx likely fueled the strong recovery in the crypto market.
The same was emphasized by market analyst Pro Blockchain in A breakdown of how Tether’s actions increased USDT supply on exchanges. As a result, the growing USDT supply is expected to influence future cryptocurrency prices, potentially pushing them higher on the charts.
Source: Pro Blockchain
Historical data projections for USDT dominance against other cryptos
When USDT dominance rises, cryptocurrency prices tend to fall, and the opposite happens when USDT dominance decreases.
On the 3-day chart, both USDT and other cryptocurrencies have closely followed this trend. For example, a key moment on October 13, 2023 highlighted a decline in USDT dominance, leading to a rise in the prices of other crypto coins.
If the uptrend in USDT breaks, the reverse should happen for cryptocurrencies, indicating potential price increases. Simply put, tThe recent rejection from the top of the USDT dominance chart could be a sign that crypto prices could soon rise.
Source: TradingView
Bitcoin retail inter at 20%
At the time of writing, BTC was trading near $60,000. However, retail interest fell to around 20% of previous levels. And yet, Bitcoin has weathered the most recent market crash and could see further price increases this year.
Fed liquidity is rebounding strongly
Finally, while Net Fed Liquidity fell by $160 billion last week, it quickly recovered by $170 billion.
Both the S&P 500 and Bitcoin saw significant declines, with the S&P 500 down 3% and Bitcoin down 30%.
This week, however, they have both recovered, with the S&P 500 up 4% and Bitcoin up 22%. The increase in USDT on exchanges could potentially support a rise in crypto assets across the board.
Source: TradingView