Avocado_onchain2025-01-27

USDC Dominance Increases, but U.S. Buying Momentum Remains Absent

An increase in stablecoin deposits to exchanges is often interpreted as a signal of buying interest in cryptocurrencies. Recently, USDC issuance has surged significantly, leading to a large influx of USDC into exchanges, while deposits of USDT (Tether) have been on a declining trend. Notably, USDC exchange deposits peaked on January 20, the day of President Trump셲 inauguration. This could be seen as an effort to strengthen both pro-crypto policies in the U.S. and the dominance of USDC, issued by the U.S.-based company Circle. However, Bitcoin price has since fallen back below $100,000, undergoing a price correction. The Coinbase Premium has also turned negative again, indicating that a strong U.S.-led buying momentum has not yet been observed. Furthermore, speculation about a price bubble in U.S. AI tech stocks, spurred by the China-developed DeepSeek AI model, is gaining traction. This has added to broader concerns about corrections in the risk asset markets, suggesting that participants in the cryptocurrency market may also adopt a more cautious approach. Under these conditions, Bitcoin is more likely to undergo a substantial consolidation period before showing signs of recovery, rather than rebounding in the short term. Thus, it is important to approach the market with a long-term perspective rather than a short-term one. I remain optimistic about Bitcoin셲 long-term outlook.