Stablecoin Inflows Reduce Due to the Bearish Investor Sentiment Towards Bitcoin
The influx of stablecoins to exchanges has dwindled as investors decided to stick with a bearish model towards Bitcoin.
CryptoQuant data points to the formation of a seismic shift in the structure of the stablecoin market. The USDT release began to stagnate, as the circulating supply of competitors such as USD Coin (USDC) resumed its uptrend from last week.
When considering the exchange inflows and reserves of each individual stablecoin, there was an increase in the USDC deposit on the exchanges. The amount of USDT has declined, leading to a plateau seen in total stablecoin reserves on exchanges.
While the circulating supply of stablecoins grew steadily during the first five months of 2021, the issue stalled in early June as the market took over the bearish trend.
There was also a spike in the number of transactions coming into stablecoins on May 29. Since then, the influx of stablecoins to exchanges has dropped to its lowest level since October 2020.
There were no stable deposits on the exchanges in June. But on June 21, after the price of BTC fell below $ 33,000, it prompted stablecoin holders to consider buying.
Whale Alert provided the further evidence of USDC activity. On June 21, when another round of sales took place in the cryptocurrency market, he published many updates about the minting and transfers of USDC.
Previously, similar surges in stablecoin issuance were followed by a prolonged period of sideways trading or price declines.
It is worth noting that not all stablecoin issues are precursors to rising Bitcoin prices.
In the long term, such a shift could be beneficial for the crypto sector, as proven projects are considered more legitimate in the eyes of governments and regulators.