Bitcoin’s price has dropped below the $59,000 mark after institutional investors paused their stablecoin accumulation, a move that previously supported the cryptocurrency’s recovery. On August 12, Bitcoin’s price fell 3.9%, trading at $58,930 as of 8:03 AM UTC, down from a weekly high of $62,510.
Institutional Inactivity Triggers Price Decline
The recent dip in Bitcoin’s price below the critical $60,000 level appears linked to institutions halting their stablecoin buying spree. On-chain analytics platform Lookonchain highlighted this in an August 12 post on X (formerly Twitter), noting that institutions stopped receiving Tether (USDT) from the Tether Treasury and transferring it to exchanges two days prior. This pause suggests a reduction in buying pressure and investor interest, as stablecoins like USDT are often used as an entry point for institutional investments in cryptocurrency.
Tether’s Influence on Bitcoin’s Recent Rally
Tether, the issuer of the world’s largest stablecoin, played a significant role in Bitcoin’s recent recovery. From August 5 to August 9, Tether minted over $1.3 billion worth of stablecoins, which were subsequently transferred to major cryptocurrency exchanges, including Kraken, Coinbase, OKX, and Bullish. This influx of stablecoins coincided with Bitcoin’s price hitting a five-month low of just above $49,500 on August 5, followed by a sharp 21% recovery that pushed prices above $60,000 by August 9.
Outlook: A Potential Recovery Hinges on Institutional Activity
For Bitcoin to regain its upward momentum, analysts believe it needs to reclaim and stabilize above the $60,000 psychological resistance. According to popular analyst Rekt Capital, Bitcoin is making the right moves to establish $60,600 as a support level, which could pave the way for a rise toward $65,000 and beyond. However, a sustained recovery likely depends on the resumption of large institutional stablecoin inflows, which have historically provided the liquidity and buying power necessary to drive Bitcoin prices higher.
