On-chain data shows ERC-20 stablecoins are currently seeing the highest number of exchange withdrawal transactions since May 2021.
Generally, investors take their coins into self-custody when they are planning to hold them in the long term, or at least, not immediately looking to trade them away. As such, a high value of the Exchange Withdrawal Transactions can be a signal that investors aren’t looking to sell the cryptocurrency right now.
Now, here is a chart that shows how the 30-day moving average (MA) of the stablecoin Exchange Withdrawing Transactions has fluctuated since 2020:
As displayed in the above graph, the Exchange Withdrawing Transactions for the ERC-20 stablecoins has seen its 30-day MA value follow a sharp uptrend recently. This suggests an increasing amount of transfers are occurring to take stables away from the custody of exchanges.
If a volatile asset like Bitcoin were involved here, this trend would have naturally been bullish for its price. But as stablecoins have their price constant around a fiat currency, selling or buying doesn’t affect their price in the same manner.
Instead, what investors do with stables can have an effect on the volatile side of the market. When holders deposit these fiat-tied tokens to exchanges, it can be an indication that they are looking to buy into Bitcoin and other cryptocurrencies.
On the other hand, their shifting the coins away from exchanges can be a sign that they want to keep their capital still in the safety of the stablecoins for some period.
Bitcoin has seen another setback during the past day as its price has returned to the $110,900 level.
