On-chain data shows that currency inflows related to Bitcoin and Ethereum have increased, alongside the recent downturn in the market.
Bitcoin and Ethereum have seen high currency inflows over the past week
In a new after on X, on-chain analytics company CryptoQuant discussed the latest trend in Exchange Inflow for Bitcoin and Ethereum. The “Exchange Inflow” here refers to an indicator that measures the total amount of a given asset (in USD) entering the wallets connected to centralized exchanges.
When the value of this metric is high, it means that investors are making large deposits on these platforms. Generally, holders transfer their coins to exchanges when they want to use any of the services they offer, including sales. As such, a sharp spike in the metric can be an indication that there is demand to trade the asset.
Here is the chart shared by CryptoQuant showing the trend in the combined 7-day cumulative Exchange Inflow for Bitcoin and Ethereum over the past few months:
The value of the metric appears to have spiked on the different exchanges | Source: CryptoQuant on X
As shown in the chart above, Bitcoin and Ethereum Exchange inflows have recently seen a seven-day cumulative increase in value above $40 billion. Given the price action over the past week, these deposits were likely made for distribution and contributed to the crash.
However, BTC and ETH aren’t the only cryptocurrencies that have seen inflows lately; stablecoins have also entered exchange-related addresses. However, unlike BTC and ETH, these fiat-pegged coins have not witnessed a uniform trend across platforms.
The trend in the stablecoin Exchange Reserve for the various exchanges | Source: CryptoQuant on X
The chart above shows data for the stablecoin Exchange Reserve for the various centralized exchanges. This indicator tracks the total number of stables currently in exchange portfolios.
It seems like this metric has broken away from the rest for Binance lately, implying that investors have chosen to deposit their coins on the platform over others. “Binance’s stablecoin reserves just reached a record $51.1 billion, the highest in its history,” the analytics firm said.
As with BTC and ETH, deposits on the stablecoin exchanges also suggest there is demand for trading the assets, but in their case the market implication is slightly different. Traders often stake these tokens on exchanges when they want to exchange them for a volatile cryptocurrency like BTC.
So while Bitcoin and Ethereum inflows could be bearish for the market, stablecoin deposits could instead be a positive sign.
BTC price
At the time of writing, Bitcoin is trading around $90,000, up more than 2% in the past week.
Looks like the price of the coin has shot up in the last 24 hours | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
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