As all cryptocurrency markets show increasing volatility again, it is essential to figure out what is going on. Analyzing the balances on exchanges can help uncover some crucial statistics. Interestingly, the majority of coins are still noting negative exchange flows despite today’s bearish pressure.
Top Crypto Exchange Flows
It may come as a bit of a surprise, but Bitcoin notes a positive exchange flow for the first time in a while. A substantial positive net flow, as over 26,300 BTC have been deposited to exchanges in the past 24 hours. Following this trend, 7.1% of the circulating Bitcoin supply is found across various centralized and decentralized exchanges. A more than respectable amount, as this influx of funds should not make much difference.
However, Bitcoin isn’t the only popular currency noting a positive exchange flow. FTT, MKR, COMP, ENJ, BAT, BNT, and many others all see a significant increase in deposits. That is not necessarily problematic, although it can make these currencies slightly more volatile. More deposits require more people buying up the supply to keep the price stable.
Ethereum, UNI, LINK, and various other currencies still note negative exchange flows today. Although the values may not be too convincing, all speculators can ask for is a negative net flow. Slowly reducing the supply on exchanges will often prove beneficial. As there is still 18.1% of the ETH supply on trading platforms, today’s 78k ETH decrease will not differ.
It is remarkable how the vast majority of top crypto assets continue to note negative exchange flows. That is a crucial development during more volatile periods like users witness today. There is no genuine reason for price fluctuations on this scale, yet it seems there are no stable price levels as of yet. Changing that narrative will prove difficult, but nothing is impossible.
What About Stablecoins?
Most people see stablecoins as assets that always note an increase in exchange balances. Although that is often true for USDT or USDC, today proves to be very different. All the significant stablecoins report a substantial decrease in exchange flows, indicating a few different things.
First of all, this can indicate the overall demand for stablecoins – and by extension, cryptocurrencies – is dwindling a bit. Not the momentum one would expect to see when prices are plummeting across the board. Normally, people tend to buy more crypto assets when prices are low, as these opportunities do not come around often.
Secondly, it may be a sign of how people are buying up significant amounts of crypto yet are unable to change the prices in a meaningful manner. The majority of price dips do not last all that long, confirming there is some desire to keep buying up lower-priced assets. A very interesting situation worth keeping an eye on.