<blockquote>Remember one of the fundamental golden rules:</blockquote><blockquote>&#34;Follow the money&#34;</blockquote><blockquote>Stablecoins are the lifeblood of Crypto</blockquote><blockquote>Let&#39;s see where that lifeblood has been flowing in search of that covetous edge in these markets</blockquote><blockquote>We&#39;re analyzing stablecoins flows to keep an eye on what Smart Money has been doing with their stables.</blockquote>In this article we cover:-Stablecoin Exchange Flow-Smart Money % Holdings in Stablecoins-Daily On-Chain Volume-Smart Money Balancestl;dr:Most recently, November saw the highest on-chain volume ever recorded, stablecoins have flown off exchanges, Smart Money continues to stay highly stabled up and their holdings of popular stables USDT, USDC and BUSD have all fallen.First all, let&#39;s start with:Stablecoin Exchange FlowWe can see that since November 4th, the balance of stablecoins on exchanges has plummeted.Roughly $4B dollars worth. This coincides with the FTX collapse and scare. People rushed to get their crypto off exchanges.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/3487ec80e77a41d687b7bd576484b831.png" />Next, let&#39;s look at the Percentage of Smart Money Holdings in StablesThe idea is:More in stables &#61; bearishLess in stables &#61; bullishWe can see that Smart Money is considerably more stabled up than they were this same time last year indicating current low risk appetite.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/02d6a37c498d4e939cae3cb04ed3f3e6.jpeg" />Looking at Stablecoin Daily On-Chain Volume:We can see that November was the highest volume month ever with the bulk of that volume coming from USDC with $585,518,197,775 being traded on-chain.This can likely also be attributed to the FTX scare and aftermath.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/c96d623443dd4a6a9693b44f204c83fa.png" />Next, we look at the historical token holdings for 4 of the most notable stables currently: $USDT, $USDC, $BUSD and $DAI.Let&#39;s see what Smart Money prefers and what they&#39;re holding:The balance of $USDT held by Smart Money has been slowly bleeding since September.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/544b7f4728504b109bf15acd72155de8.jpeg" />The Smart Money holdings of $USDC had been gradually increasing until September until which it fell and has been grinding downwards since.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/a076de82d3944370b337e149513260f6.jpeg" />Next, let&#39;s examine Binance&#39;s up-and-comer $BUSD, which we can see saw a massive spike in early November which has also sharply retraced.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/53e34f8c693647ac8fea5d1b85827570.jpeg" />Last, we can see that $DAI Smart Money holdings has gradually been increasing/ranging since the summer although it is still below what it was at the beginning of the tear<img src="https://academy-public.coinmarketcap.com/optimized-uploads/7b31261ae322479893305ec70df84e54.jpeg" />In conclusion, you want to try and stay with the trend and analyzing stablecoin flows can be very helpful in identifying and staying on the right side of a market trend.When smart money is in stables, you may want to consider being in stables and when they&#39;re shifting out of stables, you may want to consider doing the same. Being less in stablecoins would normally be considered bullish, however given the greater environment in the crypto space at the moment (FTX contagion), it can be reasoned that fear and uncertainty has contributed to the drop in stablecoin holdings.------Subscribe to receive our daily brief, extended weekly newsletter, and in-house research content!<a href="https://www.m6labs.co/s/m6-labs-research-?utm_source&#61;substack&amp;utm_medium&#61;menu" rel="noopener noreferrer nofollow">Subscribe</a>Please Share, Leave Feedback, and Follow Us on <a href="https://twitter.com/M6Labs" rel="noopener noreferrer nofollow">Twitter</a>, <a href="https://t.me/illuminatiDaily" rel="noopener noreferrer nofollow">Telegram</a>, and <a href="https://www.linkedin.com/company/m6-labs" rel="noopener noreferrer nofollow">LinkedIn</a> to stay connected with us.

Tracking Stablecoin Flows

M6 Labs 🔬

Other articles published on Dec 7, 2022

Crypto News of the Day: Nigeria sets ATM withdrawal limits to force CBDC use, ConsenSys responds ...

Blockchain and healthcare, the reasons we should care

WeMade Signs MOU with Sandbox Network to Form a Partnership

Obortech made a pitch to the PwC Sustainable Manufacturing Scale Programme

Learn Web3 with Ronaldo and BNB Chain

Band Protocol Joins Chee for Cross-chain Lending

Join our free newsletter for daily crypto updates!