$111M Stablecoins Flow Into Exchanges, Buying Pressure For Bitcoin?

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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:

Stablecoins Exchange Netflow Bitcoin

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.

Bitcoin Price

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.

Bitcoin Price Chart

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

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