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Investors have begun augmenting their holdings in $DAI and other top stablecoins amid the prevalent selloffs that have triggered a fall in bitcoin prices ($BTC) and other assets. Consequently, the cumulative balance of addresses holding $DAI has recently witnessed an astronomical surge.
The $DAI accumulation trend began as far back as March 14, according to data from the behavior analytics platform Santiment. Shark addresses (holding between 100,000 and 1 million $DAI) and whale addresses (containing 1 million $DAI and 10 million $DAI) have been added to their bags since then.
đłđŠ Even with #crypto markets rollercoastering in April, top #stablecoins like $DAI are being accumulated by sharks & whales. Since $DAI was exchanged for pumping $BTC & $ETH in mid-March, $100k-$10m $DAI addresses have added 6.4% of the supply back since. https://t.co/JfQREYLKpW pic.twitter.com/r6zqXb7zo1
â Santiment (@santimentfeed) April 24, 2023
The accumulation pattern was immediately preceded by a sharp distribution observed among these addresses in mid-March, leading to a collapse in their $DAI holdings. This distribution coincided with the latest market uptrend, which saw bitcoin rally above $28,000 on March 22.
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Amid the recent accumulation, these shark and whale addresses have added up to 6.4% of $DAIâs circulating supply to their holdings, data suggests. Consequently, addresses holding 100,000 to 1 million $DAI now own 25.53% of the $DAI supply, while those with 1 million $DAI to 10 million $DAI cumulatively have 13.43% of the stablecoinâs circulating supply.
Moreover, USDTâs market cap has continued to soar since the start of the year, with the most recent spike observed in mid-April. This upsurge has spilled into the latest market downturn, which CryptoQuant attributes to a prevailing $BTC selloff campaign.
Market-wide slump triggered by $BTC selloffs
According to a recent CryptoQuant analysis, the selloff campaign is being carried out by short-term holders who procured bitcoin between $28,000 and $30,000. Bitcoinâs modest decline supposedly plunged them into losses, and they have taken to capitulation to salvage their assets.
Price Drop Analysis: Wave of Selling as Short-term Holders Cut Losses
â CryptoQuant.com (@cryptoquant_com) April 24, 2023
"..it's crucial to consider other factors and indicators in conjunction with the STH-SOPR to gain a comprehensive understanding.."
by @real_alexei
Linkđhttps://t.co/sfEl8ko8Ch
The $BTC short-term holders spent output profit ratio (STH-SOPR) corroborates this analysis, recently dropping below 1. A value below 1 shows that assets moved within a short time frame are being moved at a loss. Notably, as observed, a drop below 1 in the STH-SOPR metric commonly coincides with a correction in bitcoinâs price.
However, the CryptoQuant analysis posits that $BTC could be poised for a potential recovery, as the STH-SOPR recently rebounded above 1 following the drop. This could result in a rise in the price range between $28,000 and $29,000. $BTC is trading at $27,376 at the time of writing, down 0.71% in the past 24 hours. Read more: Coinbase, Gemini take center stage in upcoming Celsius auction