- On-chain data indicates a potential bullish Bitcoin movement as stablecoin buying power gains traction.
- The stablecoin ratio for Bitfinex, when denominated in US dollars, recently reached its highest level since late 2022, heralding a potential surge in Bitcoin’s price.
In 2023, Bitcoin stands on the brink of a potential “big bull move,” with on-chain data implying a resurgence of stablecoin purchasing power. Analytical data provided by the on-chain analytics platform, CryptoQuant, suggest that historical bull market patterns in stablecoin supply metrics are about to repeat.
Bitfinex Stablecoin Ratio: A Beacon for Bitcoin Bull Runs
According to CryptoQuant’s stablecoin ratio metric, Bitcoin is currently in a peak accumulation phase, a state which traditionally bodes well for Bitcoin’s price progression. Cole Garner, a market cyclist and on-chain analyst, points out that the stablecoin ratio for the exchange Bitfinex, denominated in US dollars, recently skyrocketed to its highest level since late 2022.
This boost occurred following a significant market sell-off in the aftermath of the FTX meltdown, a scenario that laid the groundwork for a revival resulting in a staggering 70% increase in Bitcoin’s price during the first quarter alone. Garner emphasized on July 27 that a surge in the Bitfinex Bitcoin to stablecoins ratio typically anticipates significant bull movements, making it a “major leading indicator.”
The stablecoin supply ratio (SSR), calculated as the Bitcoin market cap divided by the market cap of all stablecoins, provides similar bullish indications. Despite Bitcoin’s price recovery throughout 2023, the SSR has remained low, suggesting that major players might be biding their time, preparing to enter the market. This could potentially trigger a significant rise in Bitcoin prices, as deduced by CryptoQuant contributor SimonaD.
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This low SSR, coupled with a decrease in trading volume since March, an increased circulating supply of Tether, and a rise in Bitcoin’s price, SimonaD posits, could be indicative of large-scale investors stocking up on stablecoins, waiting for a more opportune entry point. The recent surge in Bitcoin’s price may well be a result of a redistribution of existing market money.
Bitcoin Whales Making Waves
As reported by Cointelegraph, these “big players” show signs of reorganization at the current market levels. Bitcoin whales, in particular, recently accounted for over 40% of exchange BTC inflows – the highest in over a year.
This noticeable activity among Bitcoin whales, including the largest monthly balance decline in history, suggests significant movements within this cohort. Such substantial shifts are worthy of further investigation and could foretell major impacts on the Bitcoin market.
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