Hopium for Bitcoiners: Stablecoins Minted, Coinbase Premium, & Double Pump

After Black Thursday, we had a brutal Black Wednesday that wiped out billions of dollars from the entire cryptocurrency market.

Bitcoin crashed to $30,000 on Coinbase, representing a nearly 54% drawdown. On some exchanges, Bitcoin didn’t find its floor until $28,000, especially on derivatives platforms.

This obviously pushed the market into panic and sentiments to “extreme fear.” The Fear and Greed Index, which fell to 21, is now giving a reading of 11, last seen in March 2020 when BTC price fell to $3,800 and even lower on BitMEX. From that low, Bitcoin had rallied over 1,610% before this recent sell-off.

The good thing is “an extremely fearful market like this has historically presented solid buying opportunities during bull cycles,” said Arcane Research.

This means it could be seen as a good buy the dip opportunity, as noted by Ark Investment’s Cathie Wood, who said we are in a capitulation phase. She is still confident in her BTC price prediction of $500,000 as well.

If you need even more hopium to get through these difficult times, Bitcoin price is actually tracking the 2013 cycle pretty well.

The market has been feeling for some time now that this bull run could turn out to be the 2013 one when Bitcoin double pumped.

Even if we look at the last bull run, the cryptocurrency had several deep retracements, between 30%-40%.

The market is already showing signs of recovery as the Bitcoin price went back above $40,000.

The same day as the sell-off, more than $100 million stablecoins coins were also minted. At the beginning of this week, the market cap of the fastest-growing stablecoin USDC was nearly $16.4 billion, and today it is standing at over $17.7 billion. Tether and BUSD didn’t have much of a change in their supply.

Additionally, institutions might not have run off scared by this deep pullback, Tesla CEO Elon Musk’s temper tantrums over Bitcoin’s environmental concerns, or China banning cryptocurrency as Spencer Noon of VariantFund noted,

“gut-checked it yesterday with a few institutional contacts. Surprisingly consensus has been that corporate treasuries are completely undeterred and are thinking long-term about BTC value prop.”

The hefty premium on Coinbase reflects this sentiment as well. As the market started recovering yesterday, Bitcoin was trading at a premium on the largest US crypto exchange, as much as $3k based at one point. This represents big players scooping off the dips.

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