Bitcoin (BTC) may be on the verge of experiencing a significant upward trend, as on-chain data suggests a revival in stablecoin buying power. On-chain analytics platform CryptoQuant has analyzed stablecoin supply metrics and found patterns that resemble previous bull markets.
CryptoQuant’s stablecoins ratio metric indicates that Bitcoin is currently in peak accumulation mode, which has historically been a positive indicator for BTC price action. Notably, the stablecoins ratio for exchange Bitfinex recently reached its highest level since late 2022 when denominated in US dollars. This surge in stablecoin buying power coincided with a significant market sell-off after the FTX meltdown, ultimately driving a 70% increase in Bitcoin’s price in the first quarter of this year.
On-chain analyst Cole Garner described the Bitfinex Bitcoin to stablecoins ratio as a “major leading indicator” that has preceded every significant bull move in the past. This observation highlights the potential for a bullish trend in Bitcoin’s price.
Another metric that supports the possibility of future price rises is the stablecoin supply ratio (SSR), which is the Bitcoin market cap divided by the market cap of all stablecoins. The SSR has remained low throughout the Bitcoin price recovery in 2023, suggesting that large players in the market are waiting for favorable entry points. CryptoQuant contributor SimonaD suggests that this trend indicates big investors stocking up on stablecoins and waiting for better prices, which may have contributed to the recent increase in Bitcoin’s price.
The movement of Bitcoin whales, which are entities holding significant amounts of BTC, has also drawn attention. These whales accounted for over 40% of exchange BTC inflows recently, marking the highest level in over a year. Glassnode, an on-chain analytics firm, noted that the aggregate balance of whales decreased by -255k BTC since the end of May, the largest monthly decline in history. This decline suggests noteworthy shifts within the Bitcoin whale cohort, warranting further investigation.
It is important to note that this analysis does not provide investment advice or recommendations, as every investment involves risks. However, these on-chain data patterns and market trends hint at the possibility of a major bull move for Bitcoin in the near future.
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In conclusion, on-chain data analysis suggests that Bitcoin is poised for a bullish trend, with stablecoin buying power returning and historical patterns repeating. The stablecoins ratio metric and the stablecoin supply ratio both indicate a potential rise in Bitcoin’s price. Additionally, notable shifts among Bitcoin whales further support the idea of an impending bull move. However, it is essential for readers to conduct their own research and make informed decisions when it comes to investing in cryptocurrencies.
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