A key stablecoin metric is trending downward, implying decreased selling pressure in the Bitcoin market—an indication that BTC may be poised for an upswing.
Stablecoin Ratio Nods at Reduced Selling Pressure
Bitcoin (BTC) surged back to nearly $60,000 after the asset had dramatically dropped below $50,000 last week. This rebound is supported by a notable decline in the “exchange stablecoins ratio,” a metric tracked by blockchain analytics firm CryptoQuant. This ratio measures the volume of BTC held in wallets connected to centralized exchanges relative to stablecoins.
According to CryptoQuant, this ratio has fallen to its lowest level since February 2023, continuing a downtrend that began in June of last year. “This decline could indicate reduced selling pressure on Bitcoin, as fewer traders are converting their BTC into stablecoins,” CryptoQuant said in a Telegram discussion with CoinDesk. The firm also suggested that this trend might reflect a bullish market sentiment, where traders are holding BTC in anticipation of future price appreciation.
Stablecoin Supply Continues to Grow
Stablecoins, which are cryptocurrencies pegged to external references like the U.S. dollar, play a crucial role in mitigating price volatility. They are widely used for spot crypto purchases and derivatives trading. Data from TradingView shows that the total supply of the two largest stablecoins—Tether (USDT) and USD Coin (USDC)—has increased by approximately $2 billion since August 5, following the market crash, reaching $150.15 billion. This represents a nearly 30% increase from the previous year, indicating a steady inflow of fiat into the crypto market.
This influx of stablecoin liquidity suggests that bargain hunters are capitalizing on lower BTC prices, adding to the positive outlook for Bitcoin.
Analysts Predict Positive Trends
This optimistic trend aligns with some analysts’ views. According to Valentin Fournier, an analyst at digital assets research firm BRN, spot ETFs recorded positive net flows on Monday, with Bitcoin and Ethereum gaining institutional support following the market dip. “This resilience during times of fear could contribute to a decrease in Bitcoin’s volatility over the long term,” Fournier said in an email to CoinDesk. He noted that the $58,500 level held firm, with Bitcoin briefly rising above $60,500 before stabilizing around $59,500.
