- Addresses with 100,000 – 1 million USDC declined about 7.8%.
- USDC flow in Bitcoin has been increasing for the past few days.
More and more US dollar coins [USDC] appeared to be exchanged for bitcoin [BTC] recently. As a result of this influx, several addresses have seen their holdings decrease. What could be driving this influx, and how much is happening right now?
Read Bitcoins [BTC] Price prediction 2023-24
BTC accumulation is increasing
Most traders sold their bitcoin holdings after the FTX collapse of 2022 and the market turmoil that followed. Most traders liquidated their BTC positions in stablecoins like USDC to maintain liquidity. According to recent research by Santiment, USDC holdings increased while BTC holdings decreased. But the tide has turned for both assets.
Santiment reported that there has been a recent spike in the amount of USDC invested in Bitcoin. Based on the observed number, the number of addresses valued between 100,000 and 1 million USDC has decreased by approximately 7.8% over the past two months. The chart also showed that the USDC withdrawals were reinvested in Bitcoin.
Source: Santiment
More USDC hits exchanges
The Netflow measurement on CryptoQuant was examined to determine the size of USDC’s outflow. The Netflow indicator showed that a significant amount of USDC was traded. Most of the inflows point to traders dumping their holdings for Bitcoin and other cryptocurrencies. As of this writing, the NetFlow has been positive with about $150 million flowing into the stock exchanges.
Source: CryptoQuant
Why are stables moving?
Stablecoins are favored by crypto market participants who want to hedge against price fluctuations of Bitcoin and similar cryptocurrencies due to their value tied to fiat. When they decide the timing is right, these investors will exchange their safe assets for volatile cryptocurrencies, which will have a positive impact on the price.
So, investor demand for bitcoin and other cryptocurrencies may be reflected in a pattern of stablecoin deposits in cash markets. Traders may feel more confident entering BTC after volatility has decreased.
How much is 1.10.100 BTC worth today?
At the time of writing, the price of Bitcoin is around $24,000, with the $23,000-$21,000 range serving as the support level. The Bollinger Bands also showed that some volatility was still present, albeit not at a high level.
Source: TradingView
Recent bitcoin price action could see USDC bitcoin inflow surge even higher. However, the stablecoin will gain more at the first signs of a decline, as it did during the FTX disaster, and the USDC – Bitcoin connection will reverse.
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