Stablecoin entered the exchanges as traders prepared to position the Bitcoin ETF decision
Data shows steady coin flow amid renewed bullishness in the crypto market amid renewed bullishness in the crypto market, pending approval of a Bitcoin (BTC) exchange-traded fund (ETF) in the United States.
The trend of Tether (USDT) and USD Coin (USDC) flooding shows that traders are preparing to enter the market with their respective ETF expectations.
According to market data provider CryptoQuant, stablecoin holdings in popular crypto exchange wallets rose from $18.05 billion on January 1 to $19.99 billion on January 7.
According to data from CoinMarketCap, the total stablecoin market capitalization is estimated at $133.4 billion at the time of writing.
The total trading volume of all stablecoins is now estimated at around $70 billion, with Tether alone accounting for $55.86 billion of these volumes.
Taking a closer look at the data provided by CryptoQuant, stablecoins on crypto exchanges have increased significantly in the first eight days of 2024.
On January 8, when the price of Bitcoin flashed above $47,000, the number of inbound Storticoin transactions reached nearly 33,000, up from 22,900.
The growth of Statcoin market capitalization and the flow of Statcoin into and out of exchanges has historically been a good indicator to get a general pulse of how participants are positioned in the market.
The first place Bitcoin ETF accelerated the possibility of approval by the SEC – the deadline for the decision is January 10 – in early January, the exchange of stable coins continued to increase, because the fact that in early January it was taking a bullish trend. Market.
As previously reported by Cointelegraph, the start of Bitcoin's support in October 2020 was driven by the stablecoin's introduction to exchanges.
RELATED: Bitcoin Short ETFs Record $1M Weekly Outflow, Await Spot BTC ETF Approval
The Crypto Fear and Greed Index records “extreme greed”, which supports the argument that demand from retail and institutional investors is increasing.
Stablecoin earnings rise as traders expect “bullish Bitcoin ETF results”
Large stablecoin earnings are often seen as a short-term boost to Bitcoin's price action, suggesting that sideways capital will flow back into BTC.
Further evidence of stablecoins' activity is provided by independent analyst Cole Garner, who supports the “#Bitcoin ETF effect” by showing the increasing stablecoin market capitalization ratio in the following chart.
1/ Stablecoin mkt cap ratio leads crypto markets.
And the PBoC's liquidity will lead the constants ratio by a week or so.
The PBoC is currently high, followed by the constants ratio.
Global CB liquidity should support #Bitcoin ETF results. pic.twitter.com/mo5t5BHoEq
— Cole Garner (@ColeGarnersTake) January 9, 2024
Thus, growing stablecoin allocations on crypto exchanges may be a sign that traders are preparing for market volatility during the January 10 window for the SEC to make a final decision on a bitcoin ETF.
But what gets lost in the debates over exact dates and opinions and timelines is that the SEC and issuers are working hard behind the scenes to get these ETFs ready for this cycle, which most say won't happen. This is the main thing.
— Eric Balchunas (@EricBalchunas) November 29, 2023
According to CoinGecko data, at the time of writing, Bitcoin is at $46,715, up 0.87% in the last 24 hours.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
