Stablecoin Signals That Predicted 2022, 2023 Bitcoin Bottoms Flash Again

A surge in stablecoin transactions and active addresses indicates potential crypto market accumulation, even as Bitcoin faces downward price pressure.

Stablecoin Indicators Flash 2022-2023 Bottoming-Out Signals

On-chain data from CryptoQuant shows that the total amount of stablecoins transferred (green line) is surging, a trend that typically doesn’t coincide with a declining market.

Instead, such spikes tend to emerge after prices have already dropped and entered a consolidation phase (highlighted by the purple box).

This suggests that large buyers may be stepping in to absorb selling pressure through over-the-counter (OTC) transactions, rather than placing large orders on exchanges that could impact market prices.

A rise in active addresses (yellow box on the light blue line) further supports this trend, indicating heightened network activity as more participants engage in transactions.

A similar pattern was observed in late 2022 and mid-2023, when spikes in active addresses coincided with Bitcoin bottoming out before staging strong rallies.

Overall, here’s what’s likely happening:

• Spot Accumulation Amid Fear: Investors are taking advantage of the price shock. With market sentiment extremely bearish, they are accumulating assets at lower prices.
• Future Market Implications: Once the spot accumulation phase is complete, the futures market is expected to start driving prices upward. Since overall sentiment remains subdued, a rapid and dramatic overheating is unlikely.
• Potential for a Short Squeeze: With the current conditions, any upward movement in futures prices could trigger a short squeeze. In a short squeeze, traders who bet against the market (holding short positions) are forced to cover their positions, which can accelerate the price increase.

Is Bitcoin Market Bottoming Out?

The recent spike in Short-Term Holder Coin Days Destroyed (STH-CDD) and deep losses among recent buyers suggests Bitcoin is approaching a potential local bottom.

High STH-CDD Levels Signal Capitulation

• A -12.8K coin days per hour reading indicates intense loss realization—a sign of fear-driven selling.
• Similar spikes occurred during the August 2024 crash to $49K, which marked a local bottom.

Short-Term Holders Deeply Underwater

• The lower bound of cost basis models places Bitcoin’s potential fair value between $71.3K and $91.9K.
• This range aligns with the $70K–$88K liquidity gap, suggesting a high-probability support zone.

What Could Happen Next?

• Scenario 1: Bottom Formation Begins: If selling pressure eases and demand absorbs excess supply, Bitcoin could stabilize within the $71K–$91K range, marking a temporary or cyclical bottom before a rebound.

• Scenario 2: Further Downside Before Recovery: If macroeconomic factors (e.g., rate hikes, risk-off sentiment) intensify, Bitcoin may test the lower end of liquidity zones before a true bottom forms.