The Bitcoin Stablecoin Supply Ratio (SSR) points at thinning liquidity in the sector, potentially explaining the consolidation in the asset’s price.
Bitcoin SSR Price Surge Along with Earlier Price Surge
Analysts in CryptoQuant Quicktake have pointed this out. postThe Bitcoin SSR is experiencing a recent increase. Recently, the Bitcoin SSR has seen a rise. “SSR”Here refers to a ratio that measures the difference between the value of Bitcoin relative to the total market capitalization of all other currencies. stablecoins.
Stablecoins refer to cryptocurrencies which peg their price with a fiat money. USD based tokens are the most commonly used. Stablecoins are used by investors to avoid the volatility of other digital assets such as Bitcoin.
Although many holders keep their funds in stablecoins for a while, they eventually intend to invest into volatile currencies. As such, some view the supply of these cryptocurrencies as a measure of the ‘dry powder‘ available in the sector for BTC and other assets.
SSR tells you which sector of investment capital has the most money. If the SSR goes up it indicates that BTC is receiving more capital from stablecoins or that both have received inflows. Either way, the relative dry powder goes down.
The metric that registers a decrease indicates capital shifting to stables. Such a trend can be a sign that investors have more purchasing power relative to BTC’s market cap.
This chart shows the Bitcoin SSR’s trend for the last couple of months.
As displayed in the above graph, the Bitcoin SSR tracked the earlier BTC price surge almost 1:1, indicating that the increase in the asset’s market cap outpaced any rise in stablecoin liquidity.
Since the peak in the cryptocurrency’s price, the indicator has declined a bit, but its value still remains at a significant level of 18.8. This means that the asset’s total value is currently 18.8 times the supply of the stablecoins.
“This indicates a temporary saturation in the market unless we see additional stablecoins entering,”Quant. Bitcoin SSR values may have been at least partially responsible for recent consolidations in cryptocurrency.
The next step is to determine where this indicator will be heading. It is not surprising that a drop in value could indicate stablecoins have seen an increase in inflows. This would then set the stage for the BTC rally.
BTC price
Bitcoin’s price briefly fell below $115,000 last Friday. However, it has now recovered and is trading at around $118.800.
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Source: www.newsbtc.com
