An analyst has explained how this Bitcoin correction phase may be different from the 2024 one, based on the data of this on-chain metric.<\/p>\n
In a CryptoQuant Quicktake post<\/a>, an analyst has shared about how the latest trend in the stablecoin circulating supply has been looking. \u201cStablecoins<\/a>\u201d are cryptocurrencies that track the price of a fiat currency, with USD being by far the most popular choice. These tokens run on multiple networks, but in the context of the current topic, only the Ethereum-based ones are of interest.<\/p>\n Stablecoins are, by nature, relatively \u2018stable\u2019 in value, so the investors generally buy into these coins whenever they want to avoid the volatility associated with assets like Bitcoin.<\/p>\n Holders who invest into stables, though, usually plan to eventually go back into the volatile side of the sector. For if they didn\u2019t, they would have exited into fiat instead. Once these traders feel the time is right, they use their stablecoins to swap into Bitcoin or whatever desired coin. This shift naturally applies a buying pressure to the price of the asset.<\/p>\n Due to the potential of the stablecoins to act as dry powder for the volatile cryptocurrencies, these assets are often looked at as the \u2018available\u2019 buy supply of the sector. As such, an increase in its value may be considered as a bullish sign.<\/p>\n Now, here is the chart shared by the quant, which shows the trend in the supply of the ERC-20 stablecoins over the last year and a half:<\/p>\n As displayed in the above graph, the stablecoin supply has been on the rise during the last few months, which suggests capital has been flowing into these fiat-tied tokens. This rise in the metric has come as Bitcoin has been going through a phase of bearish momentum<\/a>.<\/p>\n In the chart, the analyst has also highlighted the trend that the indicator followed during BTC\u2019s bearish period from last year. It would seem that the stablecoin supply was moving sideways back then.<\/p>\n This would imply that as BTC corrected in 2024, a net amount of capital flowed out of the sector as if the capital was rotating into the stablecoins instead, their supply would have registered an increase.<\/p>\n This time around, however, a rotation of capital has indeed been occurring, with these stablecoin buyers potentially waiting on the sidelines for a profitable entry point. Of course, this current setup isn\u2019t the most bullish one, either; that would have been the case if both the Bitcoin market cap<\/a> and the stablecoin supply rose simultaneously.<\/p>\n Nonetheless, the fact that the stablecoins haven\u2019t been shrinking during this market downturn could still be taken as an optimistic sign for Bitcoin.<\/p>\n Bitcoin has seen yet another failed recovery rally as its price has dropped back to $84,000, after having broken above $87,000 just earlier.<\/p>","protected":false},"excerpt":{"rendered":" An analyst has explained how this Bitcoin correction phase may be different from the 2024 one, based on the data of this on-chain metric. Stablecoin Supply Is Displaying A Different Pattern In This Bitcoin Downturn In a CryptoQuant Quicktake post, an analyst has shared about how the latest trend in the stablecoin circulating supply has […]<\/p>\n","protected":false},"author":0,"featured_media":53634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-53633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/53633"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53633"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/53633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/53634"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}BTC Price<\/h2>\n