Stablecoin

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Bitcoin

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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 (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) exchange-traded funds in the United States.
The balances of tether (<a href="https://cointelegraph.com/tether-price-index" rel="noopener noreferrer nofollow">USDT</a>) and USD Coin (<a href="https://cointelegraph.com/usdc-price-index" rel="noopener noreferrer nofollow">USDC</a>) 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 <a href="https://twitter.com/cryptoquant_com/status/1355037171728584705?s=20" target="_blank" rel="noopener noreferrer nofollow">rose</a> from $18.43 billion on March 1 to surpass $19.63 billion on March 8.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/61a58718-e696-493f-be68-d53b1dc9083a.png">
 <figcaption style="text-align: center;">Stablecoin balance on exchanges. Source: Glassnode
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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.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/af310106-e71c-492a-990b-b4d669ca10d1.png">
 <figcaption style="text-align: center;">All stablecoins deposit transactions to exchanges. Source: CryptoQuant
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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. <a href="https://cointelegraph.com/explained/tether-case-explained" rel="noopener noreferrer nofollow">Tether’s USDT</a> accounts for more than 70% of this value, with a market cap of $101.2 billion.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/78ef1dd9-078b-4a86-85c7-72cca1411636.png">
 <figcaption style="text-align: center;">Total stablecoin market capitalization. Source: DefiLlama
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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 <a href="https://cointelegraph.com/news/stablecoin-inflows-to-exchanges-spike-as-traders-prepare-for-spot-bitcoin-etf-decision" rel="noopener noreferrer nofollow">growth of stablecoin inflows to exchanges</a> 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 <a href="https://cointelegraph.com/news/stablecoins-went-wild-in-the-days-before-bitcoin-s-recent-surge" rel="noopener noreferrer nofollow">previously reported by Cointelegraph</a>, growing stablecoin inflows to exchanges kickstarted Bitcoin’s rally in October 2020.
Related: <a href="https://cointelegraph.com/news/bitcoin-record-open-interest-imminent-volatility" rel="noopener noreferrer nofollow">Bitcoin just hit a record in open interest — expect imminent volatility</a>
<h2 id="are-bitcoin-traders-capitulating">Are Bitcoin traders capitulating?</h2>
Increasing stablecoin inflows to exchanges is often viewed as a<a href="https://cointelegraph.com/news/bitcoin-price-repeating-2020-breakout-90k-target" rel="noopener noreferrer nofollow"> catalyst for positive price action</a> in the crypto market, indicating that available capital is moving back into digital assets.
According to X social network user Bitcoin Munger, stablecoin market cap grew in tandem with the growth in the price of BTC.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/7458a032-dbca-4410-a98e-4298ff3b312c.png">
 <figcaption style="text-align: center;">Aggregate stablecoin market cap vs. BTC price. Source: <a href="https://x.com/bitcoinmunger/status/1766078082962612410?s=20" target="_blank" rel="noopener noreferrer nofollow">Bitcoin Munger/X</a>
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Analysts at market data tracking firm Santiment <a href="https://x.com/santimentfeed/status/1765871051614060550?s=20" target="_blank" rel="noopener noreferrer nofollow">observed</a> that medium and large investors are staying put even after BTC’s retrace after briefly hitting a high of $69,324 on March 5.
“# Bitcoin’s sharks and whales aren’t going anywhere after the post-#AllTimeHigh volatility rocked markets. At the same time, overall, the number of non-0 $BTC wallets is declining, mainly due to small traders capitulating. Generally, this is a #bullish combination. ”
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/83e80def-9b7f-41e4-94c3-16d72179889e.png">
 <figcaption style="text-align: center;">BTC wallets by number of coins held. Source: <a href="https://x.com/santimentfeed/status/1765871051614060550?s=20" target="_blank" rel="noopener noreferrer nofollow">Santiment</a>
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At the time of writing, Bitcoin is trading at $67,863, up 0.73% over the last 24 hours, according to data from CoinMarketCap.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin traders anticipate new highs, according to stablecoin flows to exchanges

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