Bitcoin (BTC) reached a new all-time high of $70,083 on March 8. Although the price corrected after hitting this high, stablecoin data indicates that traders are preparing for even higher prices.
There has been an increase in stablecoin inflows, driven by spot Bitcoin exchange-traded funds in the United States, resulting in renewed price action in the crypto market.
The balances of tether (USDT) and USD Coin (USDC) deposited into crypto exchanges have risen by 6.5% in March. This suggests that traders are getting ready to buy more crypto as they anticipate Bitcoin’s uptrend to continue.
Data from market intelligence firm Glassnode shows that holdings in known crypto exchange wallets rose from $18.43 billion on March 1 to overtake $19.63 billion on March 8.
Additionally, data from market data provider CryptoQuant reveals that stablecoin balances on crypto exchanges saw a spike in the first eight days of March. The number of stablecoin deposit transactions also increased in line with crypto prices.
Meanwhile, the total stablecoin market capitalization increased by 1.2% in March and currently stands at $145.2 billion, with Tether’s USDT accounting for over 70% of this value, with a market cap of $101.2 billion.
The total trading volume of all stablecoins is currently around $112.7 billion, with USDT alone accounting for $86.65 billion of these volumes.
Historically, the growth of stablecoin inflows to exchanges and market cap has been seen as a positive indicator for market participants’ positioning. This trend continues to be driven by the performance of spot BTC ETFs and the upcoming Bitcoin supply halving, which is approximately 41 days away.
Growing stablecoin inflows to exchanges played a significant role in kickstarting Bitcoin’s rally in October 2020, as previously reported by Cointelegraph.
Increasing stablecoin inflows to exchanges are often viewed as a catalyst for positive price action in the crypto market, signaling that available capital is flowing back into digital assets.
According to Bitcoin Munger, a user on the X social network, the stablecoin market cap has grown alongside the increase in BTC price.
Market data tracking firm Santiment’s analysts observed that medium and large investors are holding their positions even after BTC’s retrace from briefly hitting a high of $69,324 on March 5. This combination of factors is generally seen as bullish.
At the time of writing, Bitcoin is trading at $67,863, representing a 0.73% increase over the last 24 hours, according to data from CoinMarketCap.
Please note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.