Secret Bitcoin Driver: Exchanges Receiving $40 Million USDT Fuel Per Day
On-chain data shows that large amounts of stablecoin USDT have recently been moved to exchanges, potentially becoming fuel for the rally in Bitcoin and the broader cryptocurrency.
USDT exchange inflows have remained high recently
in a new postal On X, on-chain analytics company Santiment discussed the transaction flow balance trend of Tether USDT. this”Forex flow balance“”Here refers to a metric that tracks a given net amount of assets entering or exiting a wallet associated with a centralized exchange.
When the value of this indicator is positive, it means that inflows exceed outflows and a net amount of tokens enter the exchange’s wallets. This trend usually indicates investor demand for trading cryptocurrencies.
On the other hand, negative indicators mean that holders are withdrawing a net amount of tokens from these platforms. This trend indicates that the market is in an accumulation phase.
Now, the chart below shows USDT’s trade flow balance trend over the past few years:
As shown in the chart above, USDT’s trading flow balance has seen several large positive spikes over the past month, meaning large investors have been depositing their tokens.
For an asset like Bitcoin, a positive transaction flow balance can be bearish sign as it may indicate that the owner is planning to sell. However, the situation is different when the asset in question is a stablecoin.
Investors often store funds in these fiat-backed tokens to avoid the volatility of Bitcoin and other cryptocurrencies. These users eventually plan to venture into more volatile areas once they feel the conditions are right.
When the time comes, they will naturally move to exchanges to exchange for Bitcoin or any desired coin. This sale of USDT will not affect its value as the token is, by definition, always stable around the $1 mark.
On the other hand, the assets they turn to do experience volatility in response to purchases. As a result, stablecoin trading inflows are often considered a bullish sign for Bitcoin and other assets.
Over the past eight weeks, exchanges have received an average of $40 million in net USDT. “To fuel this bull rally and many of the historic cryptocurrency pumps, look for stablecoin ‘dry powder’ to continue to pour in during the final stretch of 2024,” the analytics firm explained.
bitcoin price
Bitcoin is set All Time High (ATH) Yesterday it broke the $108,000 mark, but the coin appears to have corrected since then and its price is currently around $104,500.
