USDC Exchange Reserve Observes Sharp Rise In Recent Days
As pointed out by an analyst in a CryptoQuant , the large amount of USD Coin that flowed into exchanges recently could be deployed to act as fuel for Bitcoin.The “exchange reserve” is an indicator that measures the total amount of USDC currently sitting in wallets of all centralized exchanges.
The value of the metric seems to have jumped up in recent days | Source:As you can see in the above graph, the USDC exchange reserve has usually made a top around when the BTC price has slid down in the last few months.
Most recently, the value of the reserve has seen a very sharp rise. The “inflow” indicator (which measures the total amount of coins moving into exchanges) also shown in the chart registered a big spike at about the same time as this rise.
This implies that most of the latest increase in the reserve has come from USDC that was sitting off exchanges since a while. All these stablecoins can act as potential dry powder for fueling some upwards momentum for Bitcoin after the coin’s price has plunged below $22k today. However, one thing to note is that only the USDC flowing into spot exchanges can influence the market like this. A large chunk of the latest inflows seem to have gone into derivatives instead, which, while also an indication of higher volatility for the market, doesn’t specifically mean the price will tend to go up. This volatility could make the price swing in either direction.Bitcoin Price
At the time of writing, Bitcoin’s price floats around $21.4k, down 10% in the past week.
Looks like the value of the crypto has gone down during the last few days | Source:
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com