Skip to content

Record inflow of stablecoins flood spot exchanges; Is a Bitcoin rally imminent?

Record inflow of stablecoins flood spot exchanges; Is a Bitcoin rally imminent?
Paul L.

The value of Bitcoin (BTC) is facing bearish pressure, with the asset staring at a possible breach below the crucial $20,000 level in the wake of the latest Federal Reserve interest rate hike. 

Amid the depressed prices, investors are monitoring crypto-related events likely to trigger a possible rally, with transactions relating to stablecoins being cast into the limelight. In particular, the amount of stablecoin inflowing into spot exchange has hit a new all-time high as of November 2, according to data by CryptoQuant

Stablecoin spot exchange inflow chart. Source: CryptoQuant

Implication of increased stablecoin inflow into exchanges 

Although Bitcoin has failed to break past the $21,000 level, the activities within stablecoins can be a good sign for the asset’s price in the long term. Notably, with Bitcoin trading around the $20,000 zone, focus on a possible price bottom that can spur 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 once the value signals a bottom. 

On the flip side, despite the positive outlook, the inflow of stablecoins can trigger short-term price volatility. 

In recent weeks, Bitcoin has continued to record low volatility, surpassing some of the traditional finance products. However, a spike in whale activity can result in volatility, triggering a possible short-term rally. 

Bitcoin price analysis

With the Fed’s 75 basis point interest rate hike, Bitcoin has led the crypto market to correct in tandem with the equities. By press time, the asset was trading at $20,300, dropping almost 1% in the last 24 hours. 

At the same time, Bitcoin appeared susceptible to slipping back into the $19,000 to $20,000 range. In the meantime, the flagship cryptocurrency has a market capitalization of $390 billion after peaking at $397 billion in the last 24 hours. 

Besides the onchain stablecoin activity, investors will focus on the upcoming October U.S. jobs report since it will give a potential outlook for the state of the economy likely to guide the Fed’s next tightening move. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

 

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Services

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.