Stablecoins and their outflow can help determine which direction crypto markets may head in next. If the outflow decreases, there is often a positive price change. Unfortunately, for now, neither BUSD nor USDT offers much hope in that regard.
BUSD and USDT Netflow Aren’t Helping
As the crypto markets remain stuck in semi-bearish mode ahead of the weekend, many enthusiasts hope for a market reversal. Unfortunately, that will not happen so easily. One contributing factor to a price change is the stablecoin flow to and from exchanges. While never officially proven, many people see hefty deposits of USDT, USDC, BUSD, and other stablecoins as a sign of a bull market.
For BUSD, there is a significant increase in exchange outflow volume. That trend may have numerous causes, yet it doesn’t appear to be short-lived. More specifically, the growth has spiked upward in a few days, confirming people are withdrawing this asset from exchanges quickly. Moreover, as BUSD doesn’t note too significant price fluctuations- although it isn’t stable either – it appears users want to explore other purposes.
The current three-month high exchange outflow of $7461 million is not too spectacular. In May of 2021, that figure hit over $16 million before crashing down to the $4 million range. So even though a rising outflow volume isn’t promising, if one follows the logic of “stablecoins can pump prices,” it won’t yield an automatic negative effect either.
That other major stablecoin, USDT, isn’t helping matters either. It too has a net flow of -20.2 million, which marks a monthly low. More USDT being moved off exchanges indicates less demand to purchase traditional cryptocurrencies, like Bitcoin and Ethereum. Why this dip is happening now is difficult to determine. However, two major stablecoins posting highs for negative netflow simultaneously is intriguing.
Bitcoin Exchange Inflow Rises Again
Even though BUSD and USDT are not moving in the right direction, Bitcoin enthusiasts could still hope to note a negative exchange flow. However, that is not happening either, as over 8.700 BTC in positive netflow for the week hints at more bearish pressure to come. It is not the biggest weekly inflow either, but still a remarkable trend. Most of the funds moved to Binance and Bitfinex, two platforms known for BUSD and USDT trading, respectively.
As the weekend looms around the corner, it will be intriguing to see where the markets head. Bitcoin and other crypto assets will not receive too much stablecoin support, which can mean various things. However, there is also fiat trading, which can spark a small surge over the coming days. However, everything remains possible in the crypto space. Volatile markets rarely follow logic or overall sentiment.