- Stablecoins have seen substantial growth in the cryptocurrency market this year.
- USDT continues to dominate, but USDC, backed by Circle, is also gaining traction.
- Recent large-scale USDC deposits to centralized exchanges may indicate investment strategies during market dips.
USDC deposits to centralized crypto exchanges spike, hinting at strategic investments in the crypto market amid price corrections.
USDC Deposits Surge
Research from IntoTheBlock’s Head of Research, Lucas Outumuro, reveals that on June 24, net inflow of USDC into centralized crypto exchanges hit a one-year peak of $228 million. This surge aligns with strategic buys at lower cryptocurrency prices by investors.
Echoing this development, CryptoQuant’s co-founder Ki Young Ju noted that even though the stablecoin market is growing, its ratio to Bitcoin’s market has reached levels similar to previous all-time highs.
Data on exchange reserves also shows that stablecoins have been substantially used for buy-side liquidity, suggesting that without new capital inflow, these reserves might not drive further market rallies.
“Stablecoin market cap is increasing, but its ratio to BTC market cap is similar to previous ATH levels. Exchange reserves ratio as well. This suggests stablecoins have already been used as buy-side liquidity and won’t drive the next leg up without new inflows.”
Room for Growth?
Although Bitcoin has increased by nearly 103% over the last year, its performance over the last month has been lackluster, trading around $61,400 after recent corrections. However, these corrections might offer resilient market participants long-term purchasing opportunities.
Signs of potential recovery include a minor inflow of $31 million in the US spot Bitcoin ETF, which broke a week-long outflow pattern.
Technically, Bitcoin’s Relative Strength Index (RSI) has moved up from extremely oversold levels, reaching around 33 at this writing—indicating room for growth for the leading cryptocurrency.
Experts also point to a formation of a hidden bullish divergence in Bitcoin’s daily RSI, suggesting a potential bullish breakout.
“A hidden bullish divergence is forming for BTC on the daily RSI. In addition, RSI tagged the oversold territory. Last two times it happened Bitcoin went berserk mode.”
Conclusion
The recent surge in USDC deposits into centralized exchanges suggests that investors are preparing to capitalize on lower cryptocurrency prices. Bitcoin’s technical indicators imply possible upward momentum, despite recent corrections. This scenario could present unique investment opportunities for both institutional and retail investors looking at long-term gains.
