Stablecoin inflows hit record highs for 2023, is this a buy signal?

• Centralized cryptocurrency exchanges have seen an increased inflow of stablecoins, the highest level of 2023. 
• While Bitcoin prices have declined in the short-term, analysts have identified an increase in the purchasing power of the market. 
• Bitcoin inflows to exchanges remain relatively low, suggesting BTC holders are accumulating the asset. 

Centralized cryptocurrency exchanges have witnessed a spike in stablecoin inflow, hitting the highest level in 2023. The netflow crossed $1 billion, based on data from CryptoQuant. Despite the spike in stablecoin inflow, BTC inflow to exchanges has remained relatively low, suggesting an accumulation by holders. 

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Stablecoin inflows to exchanges hit highest level in 2023

Based on data from crypto intelligence tracker CryptoQuant, stablecoins are pouring into centralized exchanges at a fast pace. Stablecoin inflow to exchanges has hit its highest level since 2023. In the chart below, the netflow of stablecoins has far exceeded 1 billion. 

Stablecoin all exchange netflow 

A spike in inflow of stablecoins is typically associated with buyers preparing for a move in cryptocurrency prices. Pumped up inflows are considered indicative of rising buying power and demand for cryptocurrencies, driving their prices higher. 

In the chart below, it is evident that stablecoins reserves across centralized exchanges has climbed from 22.8 billion to 24.2 billion since March 1. 

All Stablecoins: Exchange reserves

Interestingly, Bitcoin inflows to exchanges have remained low, implying accumulation by BTC holders. As purchasing power increases, analysts at CryptoQuant expect Bitcoin to climb higher. 

Tether whales continue accumulating, what this means for BTC?

As seen in the chart below, there is a spike in accumulation by USDT whales. Addresses holding large volumes of USDT have climbed consistently since the first week of January. Typically, an increased accumulation of the stablecoin by whales is followed by an increase in Bitcoin price. 

Tether whale accumulation 

The rising number of whales accumulating the US-Dollar pegged stablecoin Tether could be an indicator of an upcoming rally in Bitcoin. Tether whale accumulation, rising stablecoin inflows to exchanges, and relatively low BTC reserves could all act as “buy signals” for the asset as it struggles to recover from its recent decline below $23,400.

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