Stablecoin Exchange Deposits Stay Low, While Withdrawals Jump
As pointed out by an analyst in a CryptoQuant , the fact that the stablecoin exchange withdrawals have spiked while deposits have stayed low may be slightly alarming for BTC. There are two indicators of relevance here: the “stablecoin exchange withdrawing transactions” and the “stablecoin exchange depositing transactions.” As their names already imply, these metrics track the total number of withdrawals and deposit transfers, respectively, that investors of the ERC-20 stables are making right now.Generally, investors seek the safety of these fiat-tied tokens whenever they want to escape the volatility associated with the other assets in the sector. Eventually, when these holders think that the prices are right to jump back into the volatile markets, they swap their stables back for their desired cryptocurrency.
These investors usually make use of centralized exchanges for this purpose. So, when the exchange withdrawing transactions are high, it can be a sign that holders are exchanging coins like Bitcoin for stablecoins right now.On the other hand, the deposits being high can imply these investors are looking to buy volatile assets using their stables. Naturally, in the former case, Bitcoin and others may feel a bearish effect from the selling, while in the latter case, the prices might see a bullish boost.
Looks like only one of these two metrics has had a high value recently | Source:As displayed in the above graph, the stablecoin exchange depositing transactions metric has been relatively low for a while now. This would suggest that there may not be enough demand for converting stables into other assets right now.
As there aren’t any deposits happening to counteract this, the BTC price has been struggling recently. If the trend continues and more stablecoin withdrawals continue to take place, it’s possible that the cryptocurrency could take a hit in the short term.
Bitcoin Price
At the time of writing, Bitcoin is trading around $30,200, up 1% in the last week.BTC has taken a hit recently | Source: