Bitcoin exchanges are seeing a large influx of stablecoins. The stablecoins serve as substitutes for the dollar, they try to hold the price of one dollar.
Rafael Schultze-Kraft of the blockchain analytics company Glassnode always has interesting insights and does not disappoint this time. In a Tweet, he shares that huge amounts of USD Coin (USDC)are flowing towards large exchanges.
This graph from Glassnode clearly shows this trend. According to Shultze-Kraft, these are potential buyers waiting on the sidelines to board. In theory, this is all money that can flow towards bitcoin.
Records are broken
On January 29, CryptoQuant already reported that the number of stablecoins flowing towards exchanges is at a record high. The American Tether, which has a market cap of $26.5 billion, is still by far the largest stablecoin.
The company owns a total of 42.6 percent of the stablecoin market. But it seems that it is getting more and more competition and that is of course only good. Competition means that products need to become better in order to remain relevant.
This competition currently comes in particular from Binance USD (BUSD), which is in second place and USDC, which is in third place in terms of market cap.
A large amount of stablecoins that are waiting for exchanges is often seen as a bullish sign for bitcoin because it is in fact gunpowder for the buyers.
For the time being, the rally seems to be out for a while
Despite a brief pump thanks to Elon Musk who turned his Twitter bio into "#bitcoin", there seems to be little in bitcoin at the moment. The momentum of the huge rally of recent months is gone and it's waiting for the next bang up.
Today the monthly candle of bitcoin closes and the bulls have a few more hours to make something of it. At the moment, the candle looks very much like the top of the 2017 run, but most people expect this to be far from the top.
Bitcoin reached its preliminary all-time high of $42,000 on January 8, and then suffered some solid corrections. Fundamentally, however, there is nothing to worry about and bitcoin only seems to be getting stronger.