Tether (USDT) Exchange Inflows Have Remained High Recently, Helping To Fuel Bitcoin (BTC) And Wider Cryptocurrency Rally

On-chain data shows a massive amount of the stablecoin USDT has been moving to exchanges recently, potentially acting as fuel for the Bitcoin and wider cryptocurrency rally.

A massive amount of the stablecoin Tether (USDT) has been observed moving to exchanges recently, according to on-chain data, which could be acting as fuel for the Bitcoin and broader cryptocurrency rally.

The Exchange Flow Balance for USDT, an indicator that tracks the net amount of a given asset entering or exiting the wallets associated with centralized exchanges, has seen several large positive spikes over the past month.

This implies that large investors have been depositing their USDT tokens into these platforms. For assets like Bitcoin, a positive Exchange Flow Balance can be a bearish sign, as it could suggest the holders are planning to sell.

However, the same isn’t true when the asset involved is a stablecoin. Investors generally store their capital in these fiat-tied tokens to avoid the volatility of Bitcoin and other cryptocurrencies.

Such users eventually plan to venture into the volatile side once they feel the conditions are right.

And when the time comes, they naturally transfer to exchanges to swap to Bitcoin or whatever desired coin. This act of selling USDT does not affect its value since the coin is, by definition, always stable around the $1 mark.

On the other hand, The asset they are shifting to does witness fluctuations from the purchase. As such, stablecoin exchange inflows are usually considered a bullish sign for Bitcoin and other assets.

During the last eight weeks, exchanges have received a net average of $40 million USDT. “Helping to fuel this bull rally and the many historic crypto pumps, look for stablecoin ‘dry powder’ to continue flowing in during this final stretch of 2024,” explains the analytics firm.

Bitcoin set a new all-time high (ATH) beyond the $108,000 mark yesterday, but the coin appears to have seen a pullback since then, as its price is now trading around $104,500.