Bitcoin Stablecoins Supply Hasn’t Moved Much Recently
An analyst in a CryptoQuant Quicktake explained that the latest news has been unable to make the stablecoins supply budge. The “stablecoins supply” here refers to the total circulating supply of all stablecoins in the sector.
Generally, investors use stables to escape the volatility associated with most coins in the rest of the cryptocurrency sector. Thus, whenever this metric rises, new tokens of the stablecoins are being minted because there is a demand for converting to them from the other assets or fresh demand is coming into the market.The value of the metric seems to have been heading down in recent days | Source:In the graph, the quant has marked a specific correlation between the Bitcoin spot price and the stablecoin supply. It would appear that all the major increases in the former during the past year have come following rises in the latter metric. There are three instances of this trend in this period: the first formed before the January rally, the second before the March rebound, and the third before the June surge.
With the most recent rally in the asset instigated by the news of Grayscale’s victory against the US SEC, there was no such pattern in the supply of these fiat-tied assets.
This may have been one of the early signs that the rally wasn’t backed by constructive market growth, as the stablecoins supply has only been moving sideways. The Bitcoin retrace below the $26,000 level may have only been a natural consequence of this weak structure.
BTC Price
Bitcoin had earlier fully retraced the gains of the Grayscale rally, but it would appear that the decline isn’t over just yet, as the asset has now gone below the $26,000 level it had been at before the surge.
BTC has plunged during the past couple of days | Source: