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The 7-day moving average of the change in the amount of USDT held on exchanges has exceeded $568 million, the highest level this year. This is an excerpt from The Block’s Data & Insights newsletter.
Exchanges are holding more of Tether’s USDT. The 7-day moving average of the change in the amount of USDT held by exchanges reached $568 million at the beginning of this month, the highest level observed in a year. The moving average has remained positive since the beginning of February, indicating that exchanges’ USDT holdings are constantly increasing.
Exchanges’ USDT balances generally grow either if more people are holding the asset on the exchange or if the number of people looking to sell the asset exceeds the number of people looking to buy the asset. USDT is the largest stablecoin in terms of market cap.
In this case, it is likely that many users are holding USDT in their accounts after the fluctuations in the market over the past weeks. These traders may not have withdrawn their USDT yet, they are determining that the market is temporary and whether they want to buy again.
At the end of last week, it looks like we’ve taken a breather from the lows, as bitcoin rebounded to $65,000 before falling below $60,000 on Friday.
The moving average of the change in the amount of BTC held on exchanges has begun to rise slowly after experiencing a relative decline at the beginning of this month, which can be explained by the fact that, due to increased sales, balances increased by more than 6,000 BTC per day.
On the ETH side, the change in balance continues to decline after peaking at the end of March, but still remains largely positive, increasing by more than 40,000 ETH per day, which can probably be explained by a slowdown in the recent bull market.
While the exact reason for the smaller fluctuations in the amounts of BTC and ETH added to exchange balances is difficult to track, the large increase in exchanges’ USDT balances seems consistent with the end of the strong upward momentum for many crypto assets.