On-chain data shows a sudden surge in the supply of stablecoins pouring into Bitcoin – News Couple

On-chain data shows a sudden surge in the supply of stablecoins pouring into Bitcoin

On-chain data shows a recent rise in the number of stablecoin addresses sent to exchanges, which indicates an increase in the supply of dry powder to Bitcoin.

The number of stablecoin exchange stream addresses recently

As noted in a CryptoQuant post, the number of stablecoin addresses making inflow transactions to exchanges saw a sharp increase yesterday.

Stablecoins are tokens whose values ​​are tied to a fiat currency. Since it is relatively stable (as its name suggests), investors like to use it to temporarily withdraw from volatile markets like Bitcoin.

“All StableCoins: Number of Streaming Addresses of All Exchanges” is an indicator that shows the total number of addresses of these fiat tokens that send their coins to exchange wallets.

The rise in the value of the metric means that there is an increase in the supply of stablecoins to convert to other cryptocurrencies. This may indicate that investors now believe that it could be a lucrative entry into the volatile markets, and so they are converting their cryptocurrency into bitcoin and other cryptocurrencies. They may also look to withdraw coins into fiat currency.

Related reading | Bitcoin Bullish Signal: Whales Build Their Positions on Derivatives

Now, here is a graph showing the trend in the indicator’s value over the past week:

The stablecoins inflow addresses count showed a huge spike yesterday | Source: CryptoQuant

As the above chart shows, the index showed quite a lot of value yesterday, which means that a lot of investors sent their coins to the exchanges at that time.

The reason behind this trend may be the recent correction that Bitcoin suffered after the new ATH action. Investors may be optimistic about the future price of the coin and find this drop to be a good buying opportunity.

One thing to note is that the entire supply of stablecoins moving to exchanges will not flow into Bitcoin. A percentage of it will go to altcoins and another will be withdrawn to fiat currencies or held on exchanges.

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However, the increase in aggregate supply is still a good sign for BTC and may help the coin to bounce back from the correction. Continuation of such inflows could be bullish and take cryptocurrencies to all-time highs (ATHs).

Bitcoin price

At the time of writing, the price of BTC is hovering around $63K, up 4% in the past seven days. Over the past month, the value of the cryptocurrency has gained 48%.

The chart below shows the currency price trend over the past five days:

Bitcoin price chart

BTC's price observes a correction in the last few days, but now looks to be making a come back | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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