It is becoming increasingly difficult to justify an imminent bull run for Bitcoin based on market analysis. The largest digital asset has hardly budged from its consistent price of $9500-$8800 over the past couple of months but its fundamental metrics continued to remains bullish on its future.
Source: Glassnode
According to Glassnode’s recent weekly insights report, Bitcoin’s Stablecoin Supply Ratio is at an all-time low since May 2018 as capital continued to move rapidly into stable assets. Bitcoin’s Stablecoin Supply Ratio is a metric that represents the ratio between the injection of capital in Bitcoin and the capital flowing into stablecoins. It is believed that more capital moving into stablecoins is essentially beneficial for Bitcoin over the long-term as the potential for the capital move in Bitcoin’s ecosystem increases in the market.
Now higher SSR would indicate that the buying power of stablecoin for BTC would improve as well and indirectly trigger a bullish wave when the inflow of money takes place. However, it is important to note that users buying into BTC has to be en masse during the rise in stablecoin, as stable assets can be earmarked into pumping altcoins as well in the current market.
Stablecoins are becoming the new way of storing USD value in the digital asset industry and the needle may move either way depending on the interest and value of BTC and altcoins.
CEO of OKEx suggests SSR indicates BTC’s long-term viabilityÂ
Now, Jay Hao, CEO of OKEx exchange recently opined his views on the stablecoin supply ratio situation, as he was of the view that the popularity of Bitcoin hasn’t decreased amidst a rise in other altcoins.
Explaining via his blog, Hao took the example of consistent transaction count and higher OTC trading volume to imply that Bitcoin’s narrative as a healthy investment seems to be intact and the low SS ratio would eventually turn the momentum on Bitcoin’s favor.
Source: Trading View
Although Hao expects Bitcoin’s value to take advantage of low SS ratio down the line, the current fact remains that BTC is showing prominent bearish signs at the moment. As illustrated above, the formation of a descending triangle indicates an imminent pullback which may lead to a re-visit of BTC valuation below $9000.
With stocks rising on the other side, investors were becoming increasingly unsure about BTC’s bullish rally as a short-term outbreak is causing them to doubt BTC’s long-term credentials.
