The supply report of Bitcoin Stablecoin (SSR) aims at the thinning liquidity in the sector, potentially explaining the consolidation in the price of the activity.
Bitcoin SSR has increased together with the previous increase in prices
As pointed out by an analyst in a criptoquant quicktake post, Bitcoin SSR has witnessed a recently increased increase. The “SSR” here refers to an indicator that measures the relationship between the market capitalization of Bitcoin and that of the Stablecoin.
Stablecoins are cryptocurrencies that make the price of a Fiat currency, with USD -based tokens that are the most popular. Investors generally use stables when they want to escape volatility associated with other digital resources such as Bitcoin.
Many owners who keep their capital hidden from Stablecoins, however, in the end they plan to reinvest in volatile coins. Therefore, some consider the supply of these cryptocurrencies as a measure of the “dry powder” available in the sector for BTC and other activities.
Since the SSR compares Bitcoin’s capitalization of the market with this dry powder, tells us which part of the capital of investors in the sector is dominating right now. When the metric rises, it means that the capital is moving from Stablecoins to BTC or if both are receiving afflusted, that the latter is only seeing more. In both cases, relative dry powder is decreasing.
Likewise, the metric that records a decline implies that capital is moving towards the stables. This trend can be a sign that investors have more purchasing power than BTC’s capitalization.
Now, here is a graph that shows the trend in Bitcoin Ass in recent months:
As displayed in the upper graph, the SSR Bitcoin tracked down the previous increase in BTC prices almost 1: 1, indicating that the increase in the market capitalization of the activity has exceeded any increase in the liquidity of Stablecoin.
Since the peak in the price of the cryptocurrency, the indicator has decreased a bit, but its value still remains at a significant level of 18.8. This means that the total value of the activity is currently 18.8 times the supply of Stablecoin.
“This indicates a temporary saturation on the market unless we see further Stablecoins”, observes the quant. Recent values high in Bitcoin Ass could at least be partially behind the consolidation that cryptocurrency has faced.
Now it remains to be seen where the metric would go. A decline in its value would naturally suggest that Stablecoins are witnessing the afflusted, which could potentially set the next leg in the BTC manifestation.
Price btc
Bitcoin has briefly decreased below $ 115,000 on Friday, but the coin has been rebounded since then while its price is now exchanged about $ 118,800.