Ever since Bitcoin price surpassed the sluggish consolidation below $40,000, market participants have been viewing the rally as the start of a bull market. This filled market participants with optimistic and positive sentiments, and enabled the BTC price rally to record new all-time highs very close to $74,000. This resulted in a significant drop in price, shaking sentiment and causing the once very bullish sentiment to drop to neutral levels.
Secondly, the market was relatively stable again until ETH price rose above $3,700 and BTC price near $72,000. However, before those levels could reach critical resistance at $4,000 and $72,500, the bears regained the upper hand again, limiting further gains. This uncertain market movement may have made traders pessimistic about the next price move, which resulted in a slow start to stablecoin accumulation.
Santiment data suggests a possible new crypto market retracement as traders begin accumulating USDCoin and Tether. Non-empty stablecoin wallets show a steady rise as USDCoin wallets surge 13.9% and USDT 15.7% in 2024. Stablecoin adoption is a key metric for tracking trader behavior and mindset, and the above numbers suggest: Traders may be losing confidence in the rally.
In such cases, the market could face a pullback after every small rally, as has been the case since the beginning of the year. After the accumulation peaks, the market is expected to pull back, and the prices of major tokens such as Bitcoin and Ethereum may lose most of their gains. However, since stablecoin accumulation is still in its early stages, retracement validation is expected only after reaching a certain level.
