On March 8, Bitcoin (BTC) price hit a new all-time high at $70,083, and even though the price corrected sharply after hitting a new high, stablecoin data suggests that traders are preparing for higher prices.
There is an uptick in stablecoin inflows with renewed price action in the crypto market, driven by spot Bitcoin (BTC) exchange-traded funds in the United States.
The balances of tether (USDT) and USD Coin (USDC) deposited into crypto exchanges have increased by 6.5% in March, suggesting that traders are preparing to buy more crypto as they expect Bitcoin to resume its uptrend.
Data from market intelligence firm Glassnode shows that holdings in known crypto exchange wallets rose from $18.43 billion on March 1 to surpass $19.63 billion on March 8.
Stablecoin balance on exchanges. Source: Glassnode
Additional data from market data provider CryptoQuant reveals that while stablecoin balances on crypto exchanges spiked during the first eight days of March, the number of stablecoin deposit transactions also grew in tandem with crypto prices.
All stablecoins deposit transactions to exchanges. Source: CryptoQuant
In the meantime, the total stablecoin market capitalization grew by 1.2% in March to $145.2 billion at the time of publication, according to data from DefiLlama. Tether’s USDT accounts for more than 70% of this value, with a market cap of $101.2 billion.
Total stablecoin market capitalization. Source: DefiLlama
The total trading volume of all stablecoins now stands at around $112.7 billion, with USDT alone making up $86.65 billion billion of these volumes.
The growth of stablecoin inflows to exchanges and market cap have historically been considered good indicators for determining market participants’ positioning.
Accelerated by the amazing performance of the spot BTC ETFs and the upcoming Bitcoin supply halving – which is roughly 41 days away – stablecoin reserves on exchanges continue to increase.
As previously reported by Cointelegraph, growing stablecoin inflows to exchanges kickstarted Bitcoin’s rally in October 2020.
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