[ad_1]
Data shows stablecoins volume has surged up once again. Past pattern may suggest that this accumulation could be dry powder for Bitcoin’s next big move.
Bitcoin Stablecoins Reserve Rises Up Again
As pointed out by an analyst in a CryptoQuant post, the stablecoins reserve seems to have risen again back to peak levels.
The stablecoins reserve is an indicator that shows the total amount of stablecoins being held on wallets of all exchanges
When the value of this indicator moves up, it means investors could be moving out of volatile crypto markets, and into the stable fiat tokens.
High values can imply investors are piling up these coins while waiting to find the optimal openings into markets like BTC.
Related Reading | Why Bitcoin Bears Might Not Get To Buy New Lows
On the other hand, when the metric’s value shows a downtrend, it could mean investors have started to move their funds from stablecoins back into volatile markets. Large volumes moving out to exchanges and into personal wallets will also register as a decrease in the reserve.
Now, here is a chart showing the latest trend of the indicator vs the Bitcoin price:
Stablecoins reserve has once again hit a peak | Source: CryptoQuant
As the above graph shows, the metric has once again shown an uptrend recently as its values reach up near the peak again.
Lately the trend this year has been that whenever stablecoins reserve shoots up, it means an accumulation of dry powder for Bitcoin. And when the indicator goes back down, these fiat tied coins are converted to BTC, showing up as a rise in the crypto’s price.
This trend can be seen in action in the above chart as well. When BTC hit a bottom due to the El Salvador day crash, stablecoins started dropping off quickly as BTC’s price recovered back to a higher level.
Related Reading | Will The SEC Approve A Bitcoin Futures ETF In 2021? Here Are The Implications
Once the price hit a peak, the reserve started going up once again as investors took the profits of the price increase and moved into fiat-tied tokens.
Now the stablecoins reserve has plateaued at a peak again. This may mean investors are just waiting to put their coins back in once the price is suitable.
Perhaps once Bitcoin gets pumped through these coins, it will be able to make a big move up again. The analyst in the post believes this could be one of the keys to hitting a new ATH.
BTC Price
At the time of writing, Bitcoin’s price floats around $43.5k, up 0.2% in the last seven days. The below chart shows the trend in the coin’s value over the last five days.
BTC's price heading on path of recovery from the crash due to China's crypto ban | Source: BTCUSD on TradingView
[ad_2]
Source link
