Bitcoin single-day price surge linked to billions in USDC inflow

The Bitcoin (BTC) price rose to a new six-month high of $24,800 on February 16, registering a double-digit surge of 15%. 

The prolific single-day Bitcoin price surge took many by surprise, given February has been historically bearish for the top cryptocurrency. BTC price rose 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 surge to a number of factors, including a rise in dollar value and declining inflation. On-chain data indicates the current price momentum can be traced back to a mysterious fund that started pouring money into the crypto market on Feb. 10.

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

USDC withdrawal from Circle. Source: Lookonchain

There were three notable wallets whose funds were traced from Circle to various exchanges. First, a wallet address starting with โ€œ0x308Fโ€ withdrew 155 million USDC from Circle and transferred to exchanges since Feb 10. The second wallet address starting with โ€œ0xad6eโ€ withdrew 397 million USDC from Circle and sent it to various exchanges, and a third wallet starting with โ€œ0x3356โ€ withdrew 953.6 million USDC from Circle and transferred to exchanges in the same time frame.

Wallets moving funds from Circle to exchanges. Source: Lookonchain

The Bitcoin price surge also comes just days after the top cryptocurrency hit its first-ever weekly death cross. The death cross appears on a chart when an assetโ€™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 in different ways, with Bitcoin proponents calling it the start of another bull run. Samson Mow said the โ€œBTC price is still below the 200 WMA which is 25k. Bitcoin trading below the 200 WMA is an anomaly.โ€ In each of its major market cycles, Bitcoinโ€™s price historically bottoms out around the 200-week moving average. A few others called the recent price surge a bear trap while warning that large players are cashing out.