Since the inflow, the largest since mid-March, coincided with a small decline in bitcoin, it suggests that buyers may be waiting for the BTC price to fall.
Stock market deposits. Source: Glassnode
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Is a broader bitcoin rally on the horizon?
There are two key parameters within the chain that often signal the formation of a major bitcoin rally: BTC outputs and Stablkoin inputs.
The inflow of stablecoins takes place when traders turn in their handles on exchanges to exchange them for cryptocurrency.
At the same time, large outflows of BTC take place when wealthy investors take their bitcoins off the exchanges and place them in stand-alone portfolios, often to indicate their intention to keep them for the long haul.
In one hour, more than $476 million was deposited in the exchanges. According to Lex Moskovsky, CIO of Moscow Capital, this shows that there is no shortage of capital eager to buy bitcoin.
In one hour yesterday, $476 million was poured into the stock market to buy dips. Every time we go for it, there seems to be no shortage of money.
Stables experience tremendous growth
The second one. In April, Bitfinex CTO Paolo Ardoino reported that the market capitalization of Tera, the largest stablecoin on the global market, had reached $42 billion.
. @Tether_to $USDt 42B
– Paolo Ardoino (@paoloardoino) April 2, 2021
Over the next six days, Thera’s market capitalization (USDT) increased by another $2 billion, indicating strong momentum.
Since Tethers are essentially digital dollars that can be easily converted into bitcoin and other cryptocurrencies, this upward trend suggests that the amount of derivative capital in the cryptocurrency market is increasing.
In theory, if there is a lot of secondary liquidity in the market, this means significant firepower for a new rally in large cryptocurrencies like bitcoin.
Asked whether large deposits in U.S. dollars could mean demand for cash, Moskovsky replied that dollar deposits on the exchanges generally represent a buying intent.
Stable coins deposited at fairs are usually offered for sale. Some of it can be used for leveraged loans to traders […] Moreover, it is also bullish because it highlights the demand for long positions.
Meanwhile, CryptoQuant’s data shows a similar trend. For example, the price-to-earnings (P/E) ratio on all exchanges, where all bitcoin reserves on exchanges are divided by stablecoin reserves, has risen again, indicating that investors may be returning to the market.
Ratio of stabilized plugs. Source: CryptoQuant
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