On-chain data shows that Coinbase just witnessed its largest inflow of USD Coin (USDC). Here's why this may be relevant to bitcoin.
Coinbase Just Received $1.4 Billion USDC Inflow
As analyst Maartunn pointed out in a mail On X, a large amount of USDC flowed into Coinbase over the last day. The indicator of on-chain interest here is “exchange input,” which tracks the total amount of a given asset entering wallets associated with a centralized exchange or group of platforms.
An increase in currency inflow may indicate that investors are interested in selling cryptocurrencies. In the case of an asset like bitcoin, this trend can naturally be a bearish signal for the price.
However, in the context of the current discussion, the focus is on a stablecoin. While USDC currency inflows would also imply that the holder wants to sell the asset, the transaction would not affect the price as, by nature, the currency always remains stable at around $1.
However, this does not mean that the sale of USD Coin is not of interest to the cryptocurrency sector as a whole. If investors exchange stablecoins for volatile currencies like btc, then the prices of the latter assets would observe a buying effect.
Now, here is a chart showing the trend in USDC currency inflows over the last month:
The value of the metric seems to have been quite high in recent days | Source: @JA_Maartun on X
The chart above shows that the USDC currency inflow has just recorded a huge increase. According to Maartunn, this entry was headed towards the Coinbase cryptocurrency exchange.
In total, $1.4 billion worth of stablecoins have entered the platform's wallets with this inflow, the largest the exchange has ever seen. Given the extraordinary scale, this could prove quite bullish for bitcoin and others if the entity behind the entry plans to make a purchase with this dry powder.
However, there is also the scenario where the whale actually intends to exchange the stack of USD coins in favor of fiat currency instead of using it to purchase other cryptocurrencies. In that case, a net amount of capital would be leaving the sector, which would be a bearish signal.
It now remains to be seen if the huge USDC deposit ends up causing notable fluctuations in the volatile side of the market, particularly in the price of bitcoin.
bitcoin price
bitcoin had previously seen strong bullish momentum to cross above the $70,000 level, but since then, the asset has fallen back into a sideways movement, and its price remains unchanged.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/03/Coinbase-Sees-Largest-USDC-Inflow-Ever-What-This-Could-Mean" alt="bitcoin price chart” width=”1534″ height=”854″/>
The price of the coin appears to have been consolidating in the last few days | Source: BTCUSD on TradingView
Featured image from iStock.com, CryptoQuant.com, TradingView.com chart
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