Cryptocurrency exchange Binance saw users deposit $1.65 billion in stablecoins, a significant influx that is often viewed as a sign of recovering demand for spot cryptocurrencies following recent market sell-offs.
According to on-chain analytics provider CryptoQuant, this deposit coincided with nearly $1 billion worth of Ethereum (ETH) being withdrawn from Binance. This also marks the second time this month that the exchange's net stablecoin deposits have exceeded $1.5 billion. CryptoQuant's Amr Taha noted that this "highlights a new wave of capital entering the spot market."
As the largest cryptocurrency exchange by trading volume globally, Binance's movements are closely monitored for signs of broader market changes. According to CoinMarketCap data, Binance processed over $29.5 billion in trades on Tuesday, nearly six times the volume handled by the runner-up, Bybit.
Stablecoins are a primary source of funds for cryptocurrency traders, and their inflow into exchanges typically indicates readiness to purchase digital assets.
The timing on Tuesday is noteworthy, as the cryptocurrency market continued its decline from earlier in the week: Bitcoin (BTC) and ETH retraced gains made on Friday, which were driven by comments from Federal Reserve Chairman Jerome Powell suggesting readiness to cut rates in September.
Recent market turmoil stemmed from a wave of Bitcoin long liquidations over the weekend, when a whale sold 24,000 BTC on Sunday, triggering heavy selling pressure.
According to TradingView data, BTC's price briefly fell below $109,000 on Tuesday.
The decline in Bitcoin at the beginning of the week is particularly striking, as it marks the most significant deviation from the global M2 money supply in two years—M2 is a key indicator of the broad money circulating in the economy.
Since the pandemic, Bitcoin has shown a strong correlation with global M2, typically lagging by two to three months, providing traders with relatively reliable short-term price trend guidance.
That said, as noted by Real Vision founder Raoul Pal—one of the first to emphasize this relationship—the long-term correlation is stronger when measured against global total liquidity rather than just M2.
Another driving factor behind Bitcoin's recent volatility is the continued outflow from U.S. spot exchange-traded funds (ETFs). According to CoinShares data, Bitcoin ETFs recorded outflows of over $1 billion last week.
The good news is that on Monday, these products saw net inflows for the first time in six trading days.
Related: Bitcoin Plummets, $900 Million Liquidated: Prelude to September's Curse?
Original article: “Binance Stablecoin Inflows Exceed $1.65 Billion, Indicating Traders Prepare for a Rebound”
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