On-chain data shows that exchanges have recently continued to receive stablecoin deposits, which could be a positive sign for Bitcoin and other digital assets.
Stablecoin exchange Netflow remains optimistic recently.
As one analyst pointed out in a CryptoQuant Quicktake post, stablecoins have recently been flowing into exchanges. The relevant on-chain metric here is 'Exchange Netflow', which tracks the net inflows or outflows of a given asset related to centralized platform wallets.
When the value of this indicator is positive, it means that investors are making net deposits of tokens to exchanges. Such a trend indicates that holders want to trade the asset.
On the other hand, a negative indicator means that investors are more willing to hold onto cryptocurrencies as they are using the tokens for self-custody. The impact of these trends on the broader industry and the asset itself may vary, depending on the exact type of coins witnessing outflows/inflows.
For volatile assets like Bitcoin, positive Netflow might negatively impact the price, as it indicates that holders are looking to sell. BTC is also one of the main transitional points for capital in the entire industry, so selling it could also be a bad omen for other tokens.
Stablecoin deposits also mean that traders want to sell them, but since their price is always stable around $1, selling does not have a 'bearish' impact on them.
Like Bitcoin, stablecoins act as a gateway for capital entering the industry. More specifically, investors will invest funds into the stablecoin when they want to avoid volatility associated with other assets.
These holders typically plan to delve into volatile tokens and will transfer these fiat-pegged tokens to exchanges for trading once they are ready. This naturally creates buying pressure on any asset they turn to. Therefore, positive stablecoin Exchange Netflows are considered bullish for Bitcoin.
Now, here is a chart shared by Quant that shows the recent trend of stablecoin Exchange Netflow:
It is evident from the chart that stablecoin exchange netflow has mostly remained in positive territory over the past few weeks. In addition to these inflows, Bitcoin has been breaking record after record, so these stablecoin deposits have likely been fueling that asset.
The value of this indicator has recently continued to show strength, suggesting that investors have not yet finished accumulating their BTC. If the early trend continues, the latest stablecoin inflows could extend the upward momentum and possibly help the asset eventually break the dream target of $100,000.
Bitcoin price
Bitcoin dropped below $96,000 yesterday, but the token seems to have rebounded as its price is now trading around $98,400.
