The Glassnode team recorded an increase in investment in stablecoins. They believe that the observed trend is the first positive signal for Bitcoin (BTC).
Supply of the four largest stablecoins surged to new all-time highs, pushing the combined capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) to nearly $ 78 billion. Two-thirds of which is represented by Tether, quite rationally called the leader of the stable token sector.
Experts have recorded a sharp increase in the number of stablecoins entered on exchanges. This suggests that investors are waiting for a more significant weakening of the BTC rate, then they will be able to buy more Bitcoins. And accordingly, they can take advantage of the fall in the value of BTC at any time in order to buy as much cryptocurrency as possible.
Interest in stablecoins is growing
Amid the ongoing panic over COVID-19 in traditional and cryptocurrency markets, one asset category still succeeded. The cost of stablecoins is quite justified. Since thanks to the lack of volatility, they have gained popularity in the cryptocurrency markets.
In fact, some stablecoin issuers decided to mint new coins to increase the total market capitalization of the crypto industry. So, the capitalization of the largest stablecoin Tether recently updated its maximum.
Back to BTC
Now that the markets are calming down and seemingly ready to resume growth, conditions may arise that will lead to a move away from stablecoins and a return to BTC.
Speaking of the Stablecoin Supply Ratio, Glassnode experts believe that the SSR metric indicates an increased potential for the price of Bitcoin to move upwards.
SSR shows the ratio of the supply of Bitcoin to stablecoins, expressed in BTC. It is assumed that the lower the indicator, the higher the purchasing power of stablecoins relative to the first cryptocurrency and the likelihood of its price growth.
Glassnode notes that at the moment the coefficient is quite low. Therefore, in the future, this may lead to an increase in the value of the first cryptocurrency.
They added that another bullish signal for Bitcoin is the increase in USDT balance on exchanges. The indicator has been growing since the beginning of the year.
Glassnode experts talked about the dominance of the trend for long-term accumulation of BTC earlier. Moreover, they presented data from which it follows that now more than 500,000 Bitcoin addresses are cumulative. These wallets hold a total of 2.6 million coins that have not moved anywhere for about seven years.
The analyst of the Glassnode platform is confident that a new wave of growth will begin in the cryptocurrency market in the near future. They listed a number of signals that indicate an imminent rise in the price of digital money, including BTC. The key indicator is the so-called Stablecoin Supply Ratio.
If the cryptocurrency rises in price, then the purchasing power of stablecoins will decrease. That is, stablecoins are waiting for the right moment to buy BTC with them? Previously, it was repeatedly reported that the majority of investors enter Bitcoin through Tether, especially in the Asian markets.
Of course, investors don’t come to cryptocurrencies only through stablecoins. At the same time, BTC remains the key asset – this conclusion can be traced in the messages of Glassnode.
Although unprecedented events in the world increase the risk of inaccurate price prediction based on past market movements, as long as these metrics provide strong signals.