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.
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.
Amid the recent accumulation, these shark and whale addresses have added up to 6.4% of DAI’s 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 stablecoin’s circulating supply.
Moreover, USDT’s 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. Bitcoin’s modest decline supposedly plunged them into losses, and they have taken to capitulation to salvage their assets.
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 bitcoin’s 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.