Stablecoins are crucial in deciphering the cryptocurrency market’s behavior. A significant increase in stablecoin deposits to exchanges was noted on January 26, suggesting a peak in inflow volume, as reported by IntoTheBlock.
Increase in Stablecoin Volume
CryptoQuant’s analysis revealed a higher frequency of daily volume spikes in January compared to previous months. Notably, January 2 saw one of the highest monthly inflows, with over $478 million entering exchanges. Despite this, a shift towards greater outflows became apparent later in the month.
The outflows peaked on January 30, with $412 million leaving exchanges, marking it as the second-largest daily withdrawal of the month. This pattern of outflows could signal a significant shift in market sentiment. The overall 24-hour trading volume, as per 21milyon.com, stood at roughly $49 billion.
Tether (USDT) and USD Coin (USDC) dominated the trading volume, contributing to about 90% of it, with USDT alone accounting for over $42 billion. CryptoQuant’s data also highlighted a substantial USDT inflow on January 26, amounting to over $373 million.
Despite the influx, outflows remained prevalent, suggesting a cautious approach by investors, possibly in anticipation of market volatility. The movement of stablecoins into exchanges could imply a strategic move by traders to secure their funds or prepare for future investments in the volatile crypto market.