USDC Nearing Its Key Resistance Level: Alphractal

Stablecoins, often taking the backseat from Bitcoin and other top cryptocurrencies, are now in the spotlight. Based on CryptoQuant's data, the stablecoins

Stablecoins, usually overshadowed by Bitcoin and other top cryptocurrencies, are now grabbing the attention. According to on-chain data, the stablecoins market has surged to over $200 billion, with Tether’s USDT and USDC emerging as the key growth drivers.

Based on CryptoQuant’s data, the stablecoins market has gained $37 billion since the first week of November last year, around the time Donald Trump won his second presidency. The same CryptoQuant report suggests that this stablecoin performance could have a carry-over effect on Bitcoin and other cryptos.

The same data was shared by Alphractal, highlighting the growing role of USDC in the stablecoins segment. According to Alphractal, USDC is eating into USDT’s share, and other altcoins are boosting its rise in the industry.

Stablecoin Market Cap Surges – USDC Gains Momentum! Alphractal Shows

According to Alphractal, the stablecoins market has continued to expand slowly but steadily, with Tether at the top thanks to its staying power. Recent market activity shows that USDC is gaining from trades in altcoins. The research firm claims that sales in altcoins usually move to USDC, increasing its supply in the market.

However, the token is nearing its resistance level, and its price movements, to replicate, were last seen in 2021. Unlike its competitor, Tether’s USDT, USDC has strong institutional support and regulatory clarity. These are the main reasons why many investors and institutions prefer USDC over Tether’s USDT.

What About Other Stablecoins?

While USDC and USDT still lead the stablecoin race, smaller stablecoins haven’t been growing much in 2023.

The total market cap of these other stablecoins has largely remained the same, suggesting that there haven’t been any new developments or growth beyond the top two coins.

This raises concerns about the future of stablecoins, given the poor adoption and popularity of the others. Many of these “smaller stablecoin projects,” like USDT, suffer from liquidity issues, lack of institutional support, and regulatory uncertainty. It's good that the overall stablecoin market cap is increasing, but it's also worrying that only two coins, USDT and USDC, are really driving this growth.

Bullish Or Bearish: USDC’s Short-Term Outlook

In the short term, USDC's price action is approaching a critical resistance level, which, if broken, would be similar to its all-time high in 2021. If USDC continues to rally and breaches this resistance, it could indicate a bearish trend, with capital moving away from meme or altcoins to safer assets.

Interestingly, USDC rose as the prices of altcoins crashed, indicating that many investors are locking in their gains.

The featured image is from InfoMoney, and the chart is from TradingView