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On the day of a significant market downturn a week ago, bitcoin (BTC) plummeted to nearly $91,000, coinciding with a massive inflow of tether (USDT) to centralized exchanges. According to IntoTheBlock, a leading analytics firm, exchanges saw a net inflow of $2.72 billion in USDT, marking a notable financial movement within the cryptocurrency space.
IntoTheBlock highlighted the exceptional capital flows in its weekly newsletter, pointing out that the USDT netflows into exchanges on that day were the third-highest ever recorded, with the Ethereum blockchain alone accounting for the substantial figure. The firm indicated that these inflows were likely a response to the market’s sharp decline.
The analytics firm elaborated on the reasons behind this influx of USDT, suggesting that traders were depositing additional collateral to manage margin calls and prevent liquidations of their positions, which were under threat due to the market fall. Additionally, there appeared to be significant purchasing activity as investors sought to buy bitcoin at the lower prices, a strategy commonly referred to as "buy-the-dip."
Since the crash, bitcoin has shown signs of stabilization, with its price oscillating between $95,000 and $100,000, as reported by CoinDesk. Tether, alongside its regulated counterpart USDC, remains a popular choice for funding cryptocurrency purchases, playing a crucial role in the market’s liquidity dynamics.
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