Bitcoin To Smash $100,000? Rapid Stablecoin Exchange Inflows Continue
On-chain data shows that exchanges have continued to receive stablecoin deposits recently, a sign that could be positive for Bitcoin and other digital assets.
Stablecoin exchanges’ recent net flows have remained positive
As one analyst noted in CryptoQuant Quicktake postalRecently, stablecoins have been flowing into exchanges. The correlation on-chain indicator here is “exchange network traffic”, which tracks the net amount of a given asset flowing into or out of wallets associated with centralized platforms.
When the value of this indicator is positive, it means that investors are net depositing tokens to the exchange. This trend indicates that holders want to trade the asset.
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On the other hand, a negative metric means investors are more willing to hold cryptocurrencies because they are holding the coins in self-custody. The impact of these trends on the broader industry and the assets themselves may vary depending on the specific types of tokens flowing out/in.
For a volatile asset like Bitcoin, positive net flows can be negative for the price because it means holders are looking to sell. Bitcoin is also one of the major transition points for capital across the industry, so its sale could be a bad sign for other coins as well.
Stablecoin Deposits also mean traders want to sell them, but since their price is always stable around $1, selling has no “bearish” effect on them.
Like Bitcoin, stablecoins serve as a gateway for capital to enter the industry. More specifically, investors invest their money in stables whenever they want to avoid the volatility associated with other assets.
These holders often eventually plan to delve deeper into volatile tokens, and once they are ready, they will move these fiat-pegged tokens to exchanges for exchange. This naturally creates buying pressure on any asset they turn to. Therefore, positive stablecoin trading net flow is considered positive for Bitcoin.
Now, below is a chart shared by a quant trader showing the latest trends in stablecoin exchange net flows:
As can be seen from the chart, stablecoin transaction net flows have mostly been in positive territory over the past few weeks. In addition to these inflows, Bitcoin continues to break records, so it’s likely that these stablecoin deposits have been acting as fuel for the asset.
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The metric’s value has continued to perform strongly recently, so it seems investors aren’t giving up on their Bitcoin just yet accumulation However. If early trends continue, the latest stablecoin inflows could extend the rally and potentially help the asset eventually break past the dream target of $100,000.
bitcoin price
Bitcoin plummeted to below $96,000 yesterday but appears to have rebounded and is currently trading around $98,400.
Featured images from Dall-E, CryptoQuant.com, charts from TradingView.com
