Ethereum Sees $1.4 Billion Stablecoin Inflow Amid 3.46% TVL Rise

Ethereum (ETH) recently experienced a significant surge in stablecoin supply, with approximately $1.4 billion worth of stablecoins added to its network. This substantial inflow suggests increased demand for stablecoins by ETH users, implying more activity on the network and potentially leading to increased ETH usage and rising wallet balances holding ETH.

The Bridged Netflow metric, which measures the volume of assets moved into ETH from other chains, also spiked over the past 24 hours. At the time of writing, $114,000 had flowed into Ethereum, with most of it coming from SOL investors selling their holdings. This increase in bridged inflow, particularly from major cryptocurrency holders, suggests that these groups consider ETH more bullish in comparison. If this trend continues, it is likely to positively impact ETH’s price, indicating growing capital inflow and interest from major investors.

This surge in stablecoin supply coincided with a significant rise in Total Value Locked (TVL) across Ethereum protocols. TVL tracks the amount of liquidity deposited into protocols for various activities over time. As of press time, TVL had risen by 3.46%, climbing from $83.674 billion to $86.558 billion—an increase of $2.88 billion in a short span. This further supports the market’s bullish sentiment, suggesting that a large portion of ETH has been locked up by investors, thereby reducing its circulating supply.

However, despite the positive outlook, ETH’s price dropped by 1.75%, continuing the downward trend observed over the past week. Analysis indicates that the broader sentiment around ETH remains bullish. However, the asset continues to face downward pressure, particularly from spot transfers that are not aligned with the broader market outlook. At press time, spot traders had offloaded $61 million worth of ETH, appearing to be a capital-preservation tactic as these investors anticipate a potential ETH drop, contributing to the recent price decline. Continued spot selling is likely to exert more pressure on the market, possibly pushing ETH’s price further down.

ETH has continued to consolidate since entering this phase on the 13th of May—over a month ago. Typically, inflows of this kind suggest investors are accumulating ahead of a potential breakout and a longer-term rally. However, in the short term, ETH faces two potential outcomes. It could rally from its current support level, breaking toward the channel’s resistance, with momentum determining the next move. Alternatively, it may decline to the lower boundaries of one of the next two support levels—either the dashed line or the channel’s lower support. The direction ETH takes from either point will largely depend on market momentum.