$111M Stablecoins Flow Into Exchanges, Buying Pressure For Bitcoin?
On-chain data shows that large amounts of stablecoins have entered exchanges recently, which could add buying pressure to Bitcoin.
Around $111 million worth of Stablecoins poured into exchanges in the last few days
As pointed out by an analyst in a CryptoQuant post, the latest stablecoin inflow is the largest observed this month so far.
The relevant indicator here is the “exchange network flow”, which measures the net amount of stablecoins (of any kind) moving into or out of wallets on all centralized spot exchanges. The metric’s value is simply calculated by taking the difference between the inflows and outflows.
Positive values of the indicator mean that a net number of stables are being deposited on exchanges right now, while negative values suggest that investors are withdrawing their coins at the moment.
Since stablecoins have a relatively stable price due to being tied to fiat (as their name already suggests), crypto market players like to use them when they want to avoid the volatility associated with coins like Bitcoin.
When they feel that the prices are right to jump back into the volatile cryptos, these investors trade the stable back for them, thus providing a bullish effect on their prices.
Because of this, a trend of investors depositing stablecoins on spot exchanges (that is, positive online flows) could mean buying pressure for BTC and other cryptos.
Now, here’s a chart showing the trend in stablecoin exchange net flows 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 graph above, the stablecoin spot exchange online stream has registered a high value in the last couple of days.
This peak accounted for about $111 million in stables moving into spot exchange wallets. Although this is not an extremely large value, it is still the largest deposit from investors of the month so far.
If these inflows are indeed made with the aim of buying up cryptos like Bitcoin, this could have a positive impact on the prices of the volatile cryptos in the near future.
Bitcoin price
At the time of writing, Bitcoin’s price is hovering 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 showing 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
