On-chain data shows large amounts of stablecoins have entered exchanges recently, something that could provide buying pressure for Bitcoin.
Around $111 Million Stablecoins Flowed Into Exchanges In Last Couple Of Days
As pointed out by an analyst in a CryptoQuant post, the latest stablecoin inflow is the largest observed in this month so far.
The relevant indicator here is the “exchange netflow,” which measures the net amount of stablecoins (of any kind) moving into or out of wallets of all centralized spot exchanges. The metric’s value is simply calculated by taking the difference between the inflows and the outflows.
Positive values of the indicator mean a net number of stables are being deposited into exchanges right now, while negative ones imply investors are withdrawing their coins at the moment.
Since stablecoins have a relatively stable price due to them being tied to fiat (as their name already suggests), crypto market participants like to use them whenever they want to avoid the volatility associated with coins such as Bitcoin.
Once they feel that prices are right to jump back into the volatile cryptos, these investors exchange their stables back for them, thus providing a bullish effect to their prices.
Because of this, a trend of investors depositing their stablecoins into spot exchanges (that is, positive netflows) can imply buying pressure for BTC and other cryptos.
Now, here is a chart that shows the trend in the stablecoins exchange netflow over the month of October so far:
Looks like the value of the metric has spiked up during recent days | Source: CryptoQuant
As you can see in the above graph, the stablecoin spot exchange netflows have registered a high value in the last couple of days.
This spike amounted to around $111 million worth of stables moving into spot exchange wallets. While this isn’t an extremely large value, it’s still the biggest deposit by investors in the month so far.
If these inflows have indeed been made with the aim of buying up cryptos like Bitcoin, then this may have a positive impact on the prices of the volatile cryptos in the near future.
At the time of writing, Bitcoin’s price floats around $19.2k, up 3% in the last seven days. Over the past month, the crypto has lost 1% in value.
Below is a chart that shows the trend in the price of the coin over the last five days.
The value of the crypto has continued to show stale price movement in the last few days | Source: BTCUSD on TradingView
Featured image from Traxer on Unsplash.com, charts from TradingView.com, CryptoQuant.com