Record influx of stablecoins flooding spot exchanges; Is A Bitcoin Rally Imminent?
The value of Bitcoin (BTC) is facing bearish pressure, with the asset eyeing a possible break below the crucial $20,000 level in the wake of the latest Federal Reserve rate hike.
Amid the pressured prices, investors are monitoring crypto-related events that are likely to trigger a possible rally, with transactions linked to stablecoins thrust into the spotlight. In particular, the amount of stablecoin flowing into spot exchanges has reached a new all-time high as of November 2, according to data from CryptoQuant.
Implication of increased inflow of stablecoin to exchanges
Although Bitcoin has failed to break past the $21,000 level, the activity in stablecoins could be a good sign for the asset’s price in the long term. In particular, with Bitcoin trading around the $20,000 zone, focus on a possible price bottom that could stimulate interest from institutions and retail investors.
Historically, when stablecoins are sent to exchanges in significant quantities, it can indicate that institutions are planning to buy. In this case, whales are potentially positioned to jump in when the value signals a bottom.
On the flip side, despite the positive outlook, the influx of stablecoins could trigger short-term price volatility.
In recent weeks, Bitcoin has continued to record low volatility, outperforming some of the traditional financial products. However, an increase in whale activity could result in volatility, triggering a possible short-term rally.
Bitcoin price analysis
With the Fed’s 75 basis point interest rate hike, Bitcoin has seen the crypto market correct in line with stocks. At press time, the asset was trading at $20,300, down nearly 1% in the past 24 hours.
At the same time, Bitcoin appeared susceptible to slipping back into the $19,000 to $20,000 range. Meanwhile, the flagship cryptocurrency has a market cap of $390 billion after hitting a peak of $397 billion in the last 24 hours.
In addition to the onchain stablecoin activity, investors will focus on the upcoming US jobs report in October, as it will provide a potential outlook for the state of the economy that is likely to guide the Fed’s next tightening.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
