Electronic Money is moving sideways, on-chain data is still growing strongly.

Cryptocurrency prices are experiencing a sideways phase, maintaining within a narrow trading range. Over the past week, Bitcoin has only fluctuated around the $102,000 to $105,000 level, while Ethereum (ETH) has also lingered between $2,450 to $2,550. These modest fluctuations are completely contrarian to the on-chain fundamentals that are accelerating strongly.

On-chain data shows that the supply of stablecoins surged by about 80 billion dollars in just the past 365 days, reaching a record high of 240 billion dollars.

Meanwhile, the total on-chain loan amount has surged to an all-time high of (ATH), exceeding $24 billion. This is an unprecedented figure since January 2023, indicating a strong growth in demand for leverage and DeFi activity.

Stablecoin supply reaches new highs

Stagnant cryptocurrency prices often make traders anxious. However, increasing stablecoin reserves signal that the demand in the ecosystem is higher. Most on-chain transactions from DeFi exchanges to token swaps rely on stablecoins.

As of June 5, 2025, the total market capitalization of major stablecoins including USDT, USDC, and DAI reached $249 billion, up from $160 billion a year earlier, according to data from DefiLlama. This $80 billion increase represents an annual growth rate of 50%.

The expanding supply of stablecoins indicates that a large amount of capital is being injected and is ready to circulate within the blockchain ecosystem. Is this a sign of an upcoming market growth or merely an increase in activity within the DeFi sector?

Stablecoin Supply | Source: DefillamaThe growth of stablecoins often occurs before cryptocurrencies are more widely accepted. In DeFi protocols like Aave and Compound, over 15 billion dollars worth of stablecoins are locked in lending pools as collateral. These figures highlight why many on-chain metrics are flashing green.

On-chain lending reaches record levels

Loans are a key factor in any financial ecosystem. DeFi lending platforms reflect traditional credit networks by extending liquidity to borrowers.

As of the beginning of June 2025, the total outstanding value of on-chain loans has exceeded 24 billion dollars according to data from Token Terminal. This amount has steadily increased since January 2023, when it was nearly 8 billion dollars.

! 5 top projects by active loans | Source: Token TerminalThese numbers reflect the growing demand for borrowing and leverage. Aave's total (TVL) locked value has exceeded $24 billion.

With the cryptocurrency prices not changing much, investors seem to be more interested in profits rather than short-term price increases. Data from DeFiLlama shows that the total value locked on major lending platforms has reached 8 billion dollars.

Users can earn up to 5% on stablecoin deposits and 3% on loans collateralized by ETH. This is completely contrarian to bank savings interest rates, which are still close to 0.

Cryptocurrency Prices: Market Action and Sentiment

Although on-chain activities have expanded, spot prices remain low. The 14-day relative strength index (RSI) of Bitcoin has been hovering around 50 since the end of May, reflecting a neutral sentiment.

Similarly, the RSI of Ethereum is also near 52. On-chain data shows more accumulation than distribution. According to the latest data from Glassnode, the total supply market share of Bitcoin held on exchanges has fallen below 11%, the lowest level since March 2018.

Percentage of BTC balance on exchanges | Source: GlassnodeAround March 2020, more than 17.2% of the total BTC was held on exchanges. Since that peak, approximately 6% of the total supply — equivalent to about 1.26 million BTC — has been withdrawn from exchange wallets.

While crypto prices trade sideways, on-chain metrics paint a completely different picture: it is growth and accumulation. As of June 6, 2025, the supply of stablecoins and lending figures are at their highest levels in years.

The latest chart "Net Flow Rate Through Exchanges on Network Activity" from CryptoQuant shows that Bitcoin holders are holding onto their coins at levels not seen in over two years.

The 30-day MA of the money flow ratio through the exchange on the network activity | Source: CryptoQuantThese figures indicate that capital is flowing into the ecosystem even as spot buyers are temporarily pausing. Traders and investors should monitor these data points for insights into future price movements.

In summary, a sideways market can be misleading for those who focus solely on price. The stablecoin base is expanding, and increased lending activity signals that the financial system is maturing. This could be the calm before the next crypto price surge.

Dinh Dinh