The crypto market has fought difficulties with dynamics in the past few weeks, with Bitcoin and large old coins falling on new low in this cycle. Price action was anything but encouraging, and many dealers wondered if the market has already reached its climax. A closer look at Stablecoin data tells a different story that indicates that the bull cycle is far from over.
Stablecoin supply trends and market cycles
On-chain data show an interesting correlation between the stable coin market and the bull and bear cycles by Bitcoin and other cryptocurrencies. This pattern, Identified by The on-chain analysis platform Intotbeblock suggests that the stable coin supply has reached its peak in the past alongside the most important market tops. The relationship implies that an increase in stablecoin supply often signals the last phases of a bull run, whereby the decline in care generally corresponds to the beginning of the bear conditions.
A look at previous market cycles reinforces this trend, especially at Bitcoin. In April 2022, StableCoin’s entire offer reached an all-time high of $ 187 billion. Soon afterwards the offer began to decrease and perfectly tuned to the beginning of the last bear market. In this phase, Bitcoin was subjected to a longer downturn, with prices sinking steadily Until they went out In January 2023. The strong decline in the StableCoin offer reflected a more comprehensive change in investor’s mood during this period, since the liquidity left the market.
At the time of writing, the StableCoin offer has increased from its recent all-time high despite Bitcoin’s price correction. The StableCoin offer has increased to 219 billion US dollars and continues to rise. This indicates that the market is Still in a phase of the middle cycle Instead of approaching its climax.
Picture By X: Intotheblock
Stablecoins increases the market capitalization of Ethereum
Another Remarkable observation With regard to the StableCoin market, it is that stable coins still has considerable liquidity despite the latest price stagnation on the wider crypto market. Remarkably, the total offer of StableCoin is now only 10 billion US dollars from Ethereum’s market capitalization.
This phenomenon corresponds to the latest price decline, in which many investors leave their positions in Bitcoin and other cryptocurrencies and then convert them To USDT and other stable coins. However, the fact that these funds remain in the crypto industry and are not spent is positive.
Although an increasing StableCoin offer reflects the growing caution of the investors, this also means that a large capital pool can be used as soon as the market conditions improve.
Picture By X: Intotheblock
At the time of writing, Bitcoin acts with $ 84,325. spent most of the last 24 hours of trade between $ 83,688 and $ 84,504. On the other hand, the cryptom market has recorded a modest increase of 0.3%in the last 24 hours. It is currently 2.75 trillion US dollars, which is due to 25.8% compared to the peak of 3.72 trillion dollars in December 2024.
When the cycle approaches its end, the story indicates that the StableCoin offer had already decreased. Instead, the increasing trend refers to the continued market participation and the potential for further upward potential.
Selected picture of Midas, Diagram by Tradingview
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