A major trading indicator for leading stablecoin Tether (USDT) reached its highest level this year, signaling increased demand. Based on USDT’s position as a trade facilitator and a safe haven, the statistics might suggest two potential scenarios for the crypto sector.
According to statistics from crypto research firm Santiment, daily active addresses, or the number of unique users that traded the currency in a single day, reached over 83,000 on Thursday and 74,000 on Saturday, the former being the highest level since early December.
According to the statistics, multiple separate dealers appeared to be amassing the world’s largest stablecoin. Tether’s good, if limited, performance last week suggests that people are interested in the coin.
However, rising USDT accumulation has a number of ramifications for the cryptocurrency market. Given its near 1:1 peg to the US dollar, USDT is often utilized in the trading of other crypto tokens. Traders frequently swap their dollars for the token before trading it for other cryptocurrencies.
A high level of accumulation might indicate that the market is preparing for more trading action, implying greater volatility in the short future. A surge in USDT trade might ultimately spread to other coins. On the other hand, increased Tether demand might indicate that safe-haven investors are flocking to USDT.
USDT’s 1:1 peg to the dollar, along with its massive reserves, elevates it to the top of the crypto safe haven list.
Volumes of the token have increased this year, owing mostly to the Russia-Ukraine crisis, which has increased volatility and forced traders towards safe havens.
The token’s accumulation today might also signal that traders are bracing for greater market headwinds and, as a result, are pouring into safer places.
Sentiment is already strained as a result of the Russia-Ukraine war and its economic consequences. Traders must also contend with rising prices and the Federal Reserve’s aggressive measures this year.
The Bitcoin Fear and Greed Index was at fear, and it has been there since February. All of this negative attitude might be a driving factor in Tether demand.