Stablecoin Circulating Supply Moving Averages Close In On Death Cross
As pointed out by an analyst in a CryptoQuant , if the stablecoin supply doesn’t increase, a bear market could return for Bitcoin. The “stablecoin circulating supply” is an indicator that measures the total amount of stablecoin tokens that are currently in circulation.
Generally, the main reason why investors use stables is for escaping the volatility associated with most of the assets in the cryptocurrency market. Such holders may keep their stablecoins ready with them to convert into volatile coins whenever they feel that prices are right to jump back in.The values of the two metrics seem to be approaching each other in recent days | Source:
The year 2020 saw some sharp growth in the stablecoin circulating supply, which, according to the quant, led to the Bitcoin bull run observed in 2021. This trend makes sense as the stablecoin supply rising shows that more capital is entering the cryptocurrency market.
From the chart, it’s visible that this increase was taking place until the February of last year, following which the indicator reversed its direction and started decreasing instead.This decline in the metric led to the 21-day MA crossing below the 100-day MA. Interestingly, this crossover seems to have coincided with the bear market kicking off for Bitcoin and the wider cryptocurrency sector, which means that this may have acted as a death cross for the market.
Bitcoin Price
At the time of writing, Bitcoin is trading around $23,000, up 2% in the last week.Looks like BTC is consolidating | Source: