Mar 30, 2024 12:05
On-chain data shows Coinbase has just witnessed its largest USD Coin (USDC) inflow. Here’s why this may be relevant for Bitcoin. Coinbase Has Just Seen A $1.4 Billion USDC Inflow As pointed out by analyst Maartunn in a post on X, a large amount of USDC has flowed into Coinbase during the past day. The on-chain indicator of interest here is the “exchange inflow,” which keeps track of the total amount of a given asset entering into the wallets associated with a centralized exchange or group of platforms. Related Reading: Bitcoin Bull Flag Could Predict 10% Surge To $77,000, Analyst Explains A spike in the exchange inflow can indicate that investors are interested in trading away the cryptocurrency. In the case of an asset like Bitcoin, such a trend can naturally be a bearish signal for the price. In the context of the current discussion, though, a stablecoin is of focus. While USDC exchange inflows would also imply that the holder wants to sell the asset, the transaction wouldn’t affect the price since, by nature, the coin always remains stable at around $1. This doesn’t mean that the sale of USD Coin isn’t of interest to the cryptocurrency sector as a whole, however. If investors are swapping stable coins in favor of volatile coins like BTC, then the prices of these latter assets would observe a buying effect. Now, here is a chart that shows the trend in the USDC exchange inflow over the past month: The value of the metric seems to have been quite high in recent days | Source: @JA_Maartun on X The above graph shows that the USDC exchange inflow has just registered a huge spike. According to Maartunn, this inflow was headed towards the cryptocurrency exchange Coinbase. In total, $1.4 billion worth of the stablecoin has entered the platform’s wallets with this inflow, the largest the exchange has ever observed. Given the extraordinary scale, this could prove to be quite bullish for Bitcoin and others if the entity behind the inflow is planning to go on a buying run with this dry powder. There also exists the scenario, however, where the whale actually intends to trade away the USD Coin stack in favor of fiat rather than using it to buy other cryptocurrencies. In such a case, a net amount of capital would be exiting the sector, which would be a bearish sign. Related Reading: Dogecoin Soars 17% To Break $0.21 As Volume Explodes It now remains to be seen whether the massive USDC deposit indeed ends up causing any noticeable fluctuations in the volatile side of the market, particularly in the price of Bitcoin. Bitcoin Price Bitcoin had observed sharp bullish momentum earlier to cross above the $70,000 level, but since then, the asset has fallen back to sideways movement, with its price remaining unchanged. The price of the coin appears to have been consolidating in the last few days | Source: BTCUSD on TradingView Featured image from iStock.com, CryptoQuant.com, chart from TradingView.com
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