Weekly Overview: Stablecoins are shrinking, traders are excited January 19, 2023 – February 1, 2023

The cryptocurrency market last week demonstrated a classic pattern of volatility and revaluation. According to Lookonchain, it was a week of contrasting movements: massive outflows from key networks coincided with an unprecedented surge in activity on decentralized exchanges. The market overview shows a transformation in which stablecoins are losing their positions, and traders are switching to battle mode.

Stablecoin Capitalization Crisis and Liquidity Shifts

The total market capitalization of stablecoins faced serious pressure, dropping by $3.94 billion. A wave of outflows affected major ecosystems—Ethereum, Solana, and Base simultaneously lost stable liquidity. This scenario typically indicates traders searching for new trading instruments or consolidating positions ahead of major moves. Outflows from stablecoins signal revaluation of portfolios by institutional players and retail traders.

Explosive Growth in DEX Trading Activity: Volatility as a Driver

Spot and perpetual trading volumes on DEXs showed a sharp increase—directly responding to market turbulence in recent days. Price declines created ideal conditions for liquidations, attracting both day traders and position traders with complex strategies. DEXs became battlegrounds: where risk arises, opportunities emerge for experienced participants.

At the same time, seven companies increased their BTC holdings by a total of $2,003.92 (an increase of $158M)—a sign that institutions continue to think strategically despite short-term chaos.

Whales and Institutions: Accumulation Strategies and Painful Realizations

The activity of large players reflected contrasting scenarios. Tom Lee, via Bitmine, added a significant amount of ETH—41,788 tokens worth $96.95M. Meanwhile, Michael Saylor and his Strategy continued their classic approach, purchasing 855 BTC at an average price of $87,974 for a total of $75.22M. For these players, a decline is an opportunity, not a problem.

However, not all positions were salvageable. Trend Research sold off 53,589 ETH (a loss of $127M), and BitcoinOG(1011short) conducted a massive sell-off of 121,185 ETH worth $292M to cover loans. The final act was tragic: 1011short was liquidated with total losses of $128.87M— a reminder of the risks inherent in over-leverage.

This is a clear example of how one week of volatility divides the market into those who use the decline to accumulate (Tom Lee, Michael Saylor) and those who cannot withstand the pressure (1011short). The current situation shows that strategic thinking and risk management remain the key factors for survival in crypto.