On-chain data shows that USDC exchange inflows have risen. Historically, stablecoins have provided dry powder for starting new Bitcoin rallies.
USDC Exchange inflows recently surged to highs
As explained by an analyst in a CryptoQuant after, nearly a billion USDC has recently flowed into exchanges. Past pattern suggests it could lead to an uptrend for Bitcoin.
The “USD Coin exchange inflow” is an indicator that measures the total amount of the stablecoin that enters the wallets of all exchanges within a certain period of time.
When the value of this indicator rises, it means that investors are depositing a higher number of coins at the moment. Usually, holders transfer stablecoins to exchanges to convert them into a volatile crypto, such as Bitcoin. They can also withdraw the coins for approval.
Investors use stablecoins like USDC when they want to exit volatile markets and hold on until prices are favorable enough to re-enter them. This implies that a high influx of stablecoin exchanges can show that prices are good for return again.
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Here is a chart showing the trend in USD coin inflows over the past year:
It seems that the value of the statistic has recently risen to high values | Source: CryptoQuant
As you can see in the chart above, USDC inflows have surged in recent weeks. This influx amounted to approximately 1 billion coins.
There were two other cases earlier in the period where similar values were also observed. Looking at the Bitcoin price curve in the same chart, it seems that for some time after such large spikes in the indicator, the value of the crypto has always been rising as well.
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This makes sense as many investors are depositing the USDC before converting to BTC, so such influx creates a fresh supply of dry powder to support a rally.
Now it remains to be seen whether a similar effect on Bitcoin’s price will be there this time around, or if this USDC influx will pump some other coins instead.
Bitcoin price
At the time of writing, Bitcoin’s price is hovering around $39.2k, down 10% over the past seven days. In the past month, the crypto lost 11% in value.
The chart below shows the trend in the price of the coin over the past five days.
The price of BTC seems to have fallen again today | Source: BTCUSD on TradingView
Yesterday, Bitcoin showed a sharp uptrend and broke above the USD 42k level again. Today, however, the currency seems to have fallen again.
Featured image from Unsplash.com, Charts from TradingView.com, CryptoQaunt.com