Bitcoin Stablecoin Supply Ratio Shock Momentum Forms “Buy” Signal
As pointed out by an analyst in a CryptoQuant , out of the 11 previous such buy signals, 10 ended up profitable for the crypto.The “stablecoin supply ratio” (or the SSR in brief) is an indicator that measures the ratio between the market cap of Bitcoin and that of all stablecoins.
Generally, whenever investors want to avoid volatility associated with cryptos like BTC, they shift their coins into stablecoins. Once they feel that prices are right to re-enter the markets again, they buy back into them. As such, the total stablecoin supply can be looked at as potential buying pressure for other cryptos.
When the value of the SSR is high, it means the BTC supply is higher compared to the stablecoin cap, and thus there is low buying pressure in the market currently. On the other hand, low values of the indicator suggest there is high potential dry powder in the market right now. Because of this, such a trend can be bullish for the price of Bitcoin.Looks like the value of the metric has been low in recent days | Source:As you can see in the above graph, the quant from the post has marked the relevant points of trend for the Bitcoin SSR shock momentum.
BTC Price
At the time of writing, Bitcoin’s price floats around $20.9k, up 4% in the past week. Over the last month, the crypto has lost 12% in value.
The below chart shows the trend in the BTC price over the last five days.The value of the crypto seems to have spiked up over the past day | Source:
Featured image from Quaritsch Photography on Unsplash.com, charts from TradingView.com, CryptoQuant.com