Bitcoin one-day price surge tied to billions of USDC inflows

by · February 16, 2023

Bitcoin (BTC) hit a six-month high of $24,800 on February 16, registering a double-digit gain of 15%.

The one-day Bitcoin price surge surprised many, given February has been historically bearish for the top cryptocurrency. BTC’s price surged by $1,820 in a single day, making it the biggest green day for the top cryptocurrency in six months.

One-Day Bitcoin Price Chart. Source: TradingView

Many people attributed the BTC price rise to several factors, including a rise in dollar value and falling inflation. On-chain data indicates that current price momentum can be traced back to a mysterious fund that began pouring money into the crypto market on February 10.

According to data from Lookonchain, nearly $1.6 billion in institutional funds have flowed into the crypto market in the past six days. Most of the $1.6 billion came from stablecoins, especially the Circle-issued USD Coin (USDC). The owner of the funds first withdrew his USDC from Circle and then sent it to various exchanges.

USDC withdrawals from Circle. Source: Lookonchain

There were three notable wallets whose funds were traced from Circle to various exchanges. First, a wallet address starting with “0x308F” withdrew 155 million USDC from Circle and transferred to exchanges since February 10. The second wallet address starting with “0xad6e” withdrew 397 million USDC from Circle and sent it to various exchanges, and a third wallet starting with “0x3356” withdrew 953.6 million USDC from Circle and transferred it to exchanges around the same time.

Wallets move funds from Circle to exchanges. Source: Lookonchain

The Bitcoin price surge comes just days after the top cryptocurrency hit its first-ever weekly death cross. The death cross appears on a chart when an asset’s short-term moving average, usually the 50-day, crosses below its long-term moving average, usually the 200-day. Despite the bearish nature of the pattern, the death cross has been followed by above-average short-term returns in recent years.

The crypto community reacted differently, with Bitcoin supporters calls it’s the start of another bull run. Samson Mow commented on the price rise, “BTC price is still below the 200 WMA, which is 25k. Bitcoin trading below the 200 WMA is an anomaly.” In each of its major market cycles, Bitcoin’s price historically bottoms around the 200-week moving average.Other called the latest price rise a bear trap while warning that large players withdraw money.