On-chain data shows huge inflows of $222 million worth of stablecoins on exchanges, suggesting Bitcoin whales might be looking to buy the dip.
Centralized Exchanges Observe $222 Million Worth Of Stablecoin Inflows
As pointed out by a CryptoQuant post, centralized exchanges saw inflows of more than $222 million worth of stablecoins yesterday. The timing of this huge spike seems to match up with that of Bitcoin’s price showing a dip.
The exchange inflow is an indicator that shows the amount of stablecoins entering centralized exchanges from personal wallets.
When the value of this metric goes up, it means more investors are sending their coins to these exchanges for buying other cryptocurrencies like Bitcoin.
Similarly, when the stablecoins inflow indicator goes down, it could imply traders aren’t interested in trading their coins. They may want to wait to see how the price of volatile crypto moves before buying into the market.
Opposite to the above metric is the outflow indicator. And the difference between these two gives the netflow. Positive netflow implies more inflows, while negative means more outflows. Now, here is how the chart of this metric looks like right now:
The stablecoins netflows (red) spiked up on 16 August | Source: CryptoQuant
As the above graph showcases, the value of this indicator shot up yesterday as $222 million worth of stablecoins flew into centralized exchanges.
Interestingly, BTC’s price (the yellow curve in the chart) had a dip from $47.5k to $46k just preceding the above spike.
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Another metric, the exchange reserve (blue line), also spiked up in tandem with the $222 million stablecoin inflows. The exchange reserves show the total amount of tokens on exchanges so an increase in its value makes sense here.
Given the timing matches up with the Bitcoin dip, and the fact that these inflows are quite significant, it seems likely that these are whales and institutional investors trying to buy into the BTC dip.
At the time of writing, BTC’s price floats around $46.4k, up 2% in the last 7 days. Over the last month, the cryptocurrency has amassed 48% in gains.
Below is a chart showing the trends in Bitcoin’s value in the past three months:
BTC's price stalls around the $46k mark | Source: BTCUSD on TradingView
After continuing on an overall positive uptrend for quite the while, BTC seems to have finally slowed down as the crypto’s price has stagnated around the $46k level.
Related Reading | Weekly Bitcoin Momentum Cross Bullish For First Time Since March 2021
It’s unclear which way BTC will continue in once it escapes from this range. If the stablecoins inflows are anything to go by, the price leans bullish right now. However, there is still the possibility that a bear market could be ahead instead.