Bitcoin (BTC) reached a new all-time high of $70,083 on March 8, and although the price corrected afterwards, data on stablecoins suggests that traders are preparing for further price increases.
There has been an increase in stablecoin inflows as the crypto market experiences renewed price action, driven by spot Bitcoin exchange-traded funds in the United States.
In March, the balances of tether (USDT) and USD Coin (USDC) deposited into crypto exchanges increased by 6.5%, indicating that traders are anticipating a resumption of Bitcoin’s upward trend.
Glassnode, a market intelligence firm, reported that holdings in known crypto exchange wallets rose from $18.43 billion on March 1 to overtake $19.63 billion on March 8.
Additional data from CryptoQuant, a market data provider, revealed that stablecoin balances on crypto exchanges surged during the first eight days of March, with the number of stablecoin deposit transactions also rising alongside crypto prices.
Meanwhile, the total stablecoin market capitalization grew by 1.2% in March to reach $145.2 billion, according to DefiLlama.
Tether’s USDT accounts for more than 70% of this value, with a market cap of $101.2 billion.
The total trading volume of all stablecoins currently stands at approximately $112.7 billion, with USDT alone contributing $86.65 billion to these volumes.
Historically, the growth of stablecoin inflows to exchanges and market capitalization has been seen as a positive indicator of market participants’ positioning.
Driven by the impressive performance of spot BTC ETFs and the upcoming Bitcoin supply halving, which is about 41 days away, stablecoin reserves on exchanges continue to increase.
As previously noted by Cointelegraph, the surge in stablecoin inflows to exchanges sparked Bitcoin’s rally in October 2020.
Increasing stablecoin inflows to exchanges are often seen as catalysts for positive price movements in the crypto market, indicating that available capital is flowing back into digital assets.
Bitcoin Munger, a user on the X social network, pointed out that stablecoin market capitalization has grown in parallel with the rise in BTC price.
Market data tracking firm Santiment’s analysts observed that medium and large investors are holding their positions even after BTC’s retracement from its brief high of $69,324 on March 5.
At the time of writing, Bitcoin is trading at $67,863, representing a 0.73% increase over the past 24 hours, according to CoinMarketCap.
Please note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research before making any decisions.