The data on the chain shows that the stable coin reserve has reached a new high (ATH). Here is what this could mean for Bitcoin’s price based on past patterns.
Stablecoins All Exchanges Reserve get new ATH
One CryptoQuant pointed this out PublishThe total reserve on all stablecoin exchanges has increased to a new ATH. The indicator’s past patterns could help predict the future price of Bitcoin.
The stablecoin pool of all exchanges is a metric that measures how many stablecoins are present on all centralized exchanges.
If this indicator is increasing in value, it means that more stablecoins will be sent to exchanges for other coins like Bitcoin or that investors are withdrawing from volatile markets to make way for fiat.
A declining trend in the stablecoin pools would suggest that these coins have been transferred to personal wallets or converted to other crypto like BTC.
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Here’s a chart to show how the BTC Price and the reserve on all stablecoin exchanges.
The graph above shows two interesting features. The first is the fact that stablecoins supply appears to increase as Bitcoin prices fall.
This is understandable since avid investors would like to adjust their positions in the market in response to a downtrend in price.
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Another characteristic is that, soon after the peak, stablecoins pools start to decline and the price for BTC starts rising.
This trend has been observed twice in the last month. If this is a trend, the Bitcoin price should rise, at least in short term, since the indicator is currently showing a large spike.
Bitcoin’s current price is $ 46.9,000. This is an increase of 2.5% in the past seven days. The cryptocurrency has seen 22.8% growth in the past month.
Below is a chart showing the BTC price trend for the past five days:
Source: BTCUSD on| Source: BTCUSD on TradingView
Yesterday’s strong uptrend in BTC was initiated by a cryptocurrency that rose from $ 47,000 and $ 49,000 to $ 49,000 today. The price of the crypto dropped sharply shortly after, but it was able to retest the $50,000 level. This was the second time. The value reached as high as $ 46,000
Price action would indicate at least a temporary bear market. However, if the stablecoins pattern holds true, Bitcoin’s price may rise soon as investors will use the linked coins to purchase the lower BTC.
Featured image taken from Unsplash.com. Charts from CryptoQuant.com and TradingView.com.