Stablecoins are now emerging as a pivotal force, particularly influencing Bitcoin’s recent price movements. Data from the on-chain analytics firm Glassnode reveals a notable shift in the stablecoin supply ratio (SSR) oscillator, signaling an increase in stablecoin “buying power.”
This trend has become a significant factor contributing to Bitcoin’s price performance.
Stablecoin Supply Moves 3.5% Higher
The SSR oscillator, a critical tool in understanding supply and demand dynamics between “BTC and USD,” has exhibited a marked decline. This decrease indicates that stablecoins currently possess enhanced purchasing power to acquire Bitcoin, according to Glassnode.
From a peak of 4.13 in October, the SSR oscillator has dropped sharply to just 0.74 as of January 22. This shift aligns with Bitcoin’s ascent to two-year highs above $48,000 this month, suggesting a direct correlation between stablecoin supply trends and Bitcoin’s bullish trajectory.
James Van Straten, a research and data analyst at CryptoSlate, has highlighted a significant increase in stablecoin supply starting from Q4 of 2023, a trend that has continued into the new year.
As we saw last week with the rotation of stablecoins moving into #Bitcoin, that sent BTC above 42k.
Stablecoin supply is now 10B higher from the low,
and 3.5% higher in the past 30 days. https://t.co/QIq2sEA9yg pic.twitter.com/YFcSzZhan8— James Van Straten (@jvs_btc) January 31, 2024
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Author: Samuel Edyme
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