Stablecoin Exchange Inflows Precede Bitcoin Rally, Says Santiment
The on-chain analytics firm Santiment has revealed that the inflows of Tether (USD) and USD Coin (USDC) to exchanges preceded the recent Bitcoin rally. According to Santiment, the supply of various assets on exchanges is an important indicator in the cryptocurrency sector. The chart provided by Santiment shows the trend in this indicator for Bitcoin, Ethereum, Chainlink, Polygon, Tether, and USD Coin over the past few months.
Polygon Supply Increase on Exchanges Raises Concerns
Polygon has seen a 0.7% increase in its supply on exchanges in the past month, which could be a bearish sign for its price. On the other hand, Bitcoin has observed a decline in its supply on exchanges, indicating that investors may be accumulating and moving their coins to self-custodial wallets.
Stablecoin Exchange Supply Indicates Investor Swaps
An increase in the supply of stablecoins on exchanges suggests that investors are looking to swap these tokens. This selling pressure actually provides a buying boost to the volatile side of the market as investors may use stablecoins to shift into Bitcoin and other cryptocurrencies.
Tether and USD Coin Exchange Supply Rise Preceded Crypto Rally
Between August and October, both Tether and USD Coin experienced an increase in exchange supply. Tether saw 3.54% of its supply move into exchanges, while USD Coin had 0.72% of its supply move into platforms. According to Santiment, these transfers were the predecessor to the crypto-wide rally from late October to mid-November.
Cooling Down of Stablecoin Supply Raises Concerns
In the past month, there has been a decrease in Tether supply on exchanges, while USD Coin supply has remained relatively unchanged. This suggests a potential decrease in buying pressure, which could have an impact on the market.
Hot Take: BTC Price Correction Under $36,800
Bitcoin has experienced a drawdown and its price has slipped below the $36,800 mark. This correction comes after a period of growth and indicates a potential change in market sentiment.
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