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News/Bitcoin goes flat as traders become vigilant amid market headwinds

Bitcoin goes flat as traders become vigilant amid market headwinds

Mar 9 2023

last year7 minutes read

Silvergate Bank, known for its crypto-friendly services, has been a popular choice for many companies in the industry with over 90% of deposits from crypto firms at one point. However, the fallout of this bank can lead to a shift in investment practices, as investors will potentially transfer their funds to stablecoin issuers to receive stablecoins rather than depositing their dollars using traditional banking services.

According to crypto data provider Kaiko’s recent report, stablecoins are continuing to gain traction in the market. For instance, USDT’s dominance in Bitcoin trading volumes has reached an all-time high of 93% versus the US dollar, a spectacular rise from only 3% in 2017. However, the report also stated that the risk of stablecoin issuers still needing access to a crypto bank is now further concentrated, indicating a need for diversification in the market.

Among the available stablecoins, USDT has emerged as the most popular, with its dominance surpassing 53% as of today on DefiLlama. Scrutiny around Binance USD (BUSD) has contributed to the adoption of Tether (USDT) and Circle (USDC): both stablecoins have seen their dominance rise since early February when BUSD faced the crackdown from regulators.

The Digital Euro Association (DEA) also showed their support for stablecoins in the latest report, in which they argued that Europe can use stablecoins for machine-to-machine (M2M) payments. According to DEA, stablecoins could increase scalability and reduce intermediaries, which would alleviate the usability and security challenges that APIs present. Incorporating stablecoins into the financial system may become crucial in the long run.

On the other side of the globe, China is taking further steps to boost the adoption of its central bank digital currency (CBDC). The country is integrating the digital yuan app into WeChat Pay, one of the most widely-used payment methods in China with over 1 billion users. Additionally, the e-commerce giant and the Bank of China have recently joined the Hong Kong-Mainland China “cross-border” digital yuan pilot.

Despite the growing potential of stablecoins, the crypto market is currently experiencing a decline in bullish sentiment. European cryptocurrency investment firm CoinShares’ market report shows the fourth consecutive week of outflows from crypto investment funds, with last week’s outflow reaching \(17 million. Negative sentiment is primarily focused on Bitcoin, with outflows touching \)20 million. Short-Bitcoin products saw minor inflows of $1.8 million, marking their third straight week of inflows.

Bitcoin (BTC) continues to trade flat under $22,500 while traders are hesitant to place strong bids ahead of a crucial week of economic developments in the U.S. when nonfarm payroll statistics and Powell’s testimony are expected to create volatility.

However, negative Bitcoin funding rates suggest a bet on the downside, according to the crypto analytics tool CryptoQuant. Data from Glassnode pointed out that a drop to \(19,300 would bring STH-MVRV back to 1.0, which means spot prices would return to the cost basis of short-term holders who tend to take profit since \)25,000 and prevent Bitcoin to break $23,800 recently.

Ethereum (ETH) and other major altcoins follow the sideways movement while Glassnode suggests about 65% of ETH’s circulating supply is in profit.

Top altcoin gainers and losers


Enjin Coin ENJ (+4.59%)

Immutable X IMX (+4.53%)

Ripple XRP (+2.85%)


Stacks STX (-7.77%)

OKB OKB (-5.83%)

Synthetix SNX (-5.33%)

NFT Market Map

Otherdeed (+215.58%), Bored Ape Yacht Club (+100.39%), and MutantApeYachtClub (-14.07%) regained their top spots in the top 5 NFT collections by volume after the sale of TwelveFold.

HoshiboshiAries (+102.27%), an anime-inspired project, made its way to the top volume list as NFTGo Japan spotted unusual trading activities.

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