On March 29, a massive $1.4 billion transfer of USDC, a fiat-backed stablecoin issued by Circle, was moved to Coinbase, one of the leading crypto exchanges.
Sharing a screen grab that cites CryptoQuant’s data, the analyst said the hefty inflow could suggest that bulls might be ready to inject capital. If that happens, top cryptocurrencies like Bitcoin and Ethereum could benefit.
Are Bitcoin And Ethereum Ready To Turn The Corner?
Looking at Bitcoin and Ethereum, it is evident that sellers might be in control, rejecting attempts for higher highs. Bitcoin trades below the $71,600 resistance level, marking March 28 highs.
On the other hand, Ethereum is yet to fully capitalize on post-Dencun expectations to break higher, above $3,700. The coin remains under pressure, with the odds of falling below $3,200 a possibility if bulls fail to flow back.
The analyst believes that the influx of USDC into Coinbase indicates a growing willingness among investors to enter the crypto market. Stablecoins have emerged as preferred conduits for traditional finance capital to flow to crypto.
Popular stablecoins like USDT and USDC are backed by fiat and can be redeemed for cash. Usually, stablecoin inflows into the exchange are seen as a positive development, a net positive for crypto, and mostly leading assets.
Will History Repeat? Past USDC Inflows Lifted Price
Still, while prices might expand in the coming sessions, the fact that $1.4 billion USDC was channeled into Coinbase can’t be the main fuel. The crypto and Bitcoin or Ethereum markets have deep liquidity, with sentiment mostly or big money injection from institutions as primary drivers of price.
Even so, the general confidence is warranted. This isn’t the first time a bulk USDC transfer to Coinbase has coincided with a crypto upswing. In January 2023, the analyst notes, a $1.3 billion USDC inflow to Coinbase preceded a price spike that saw the coin rise from around $16,300.
Therefore, with this historical precedent in mind, traders are bullish and expect a possible recovery for Bitcoin and Ethereum.
USDC has been steadily gaining traction and is now poised to potentially dethrone XRP as the world’s sixth most valuable crypto. According to CoinMarketCap data on March 29, USDC has a market cap of $32.5 billion. On the other hand, XRP, the native currency of the XRP Ledger, has a market cap of over $34 billion.
Feature image from Canva, chart from TradingView
