With Stablecoin Balances at all time highs any dip in Bitcoin will likely be short lived...
There's now almost $8 billion sitting in stable coins on Exchanges
If you think the price of bitcoin and some of these altcoins is/are over-extended and are due to crash any minute, you will likely be waiting for a while...
The amount and number of stable coins sitting on Exchanges just hit a new all time high around $8 billion.
This is the highest level we have seen... ever.
Check it out:
(Source: https://twitter.com/cryptoquant_com/status/1361208587066859520/photo/1)
This represents roughly a 3x increase over the last 3 months, pretty much mirroring the price of bitcoin.
Not exactly what you would expect...
Normally, when the price of bitcoin is going higher, the amount of stable coins sitting on Exchanges drops as people FOMO their way in.
Then when things start to look bearish in bitcoin, they move back to the sidelines and the stable coin balances increase again..
Historically we have seen stable coin balances peak when the price of bitcoin bottoms and hit lows when the price of bitcoin tops. They often tend to be inversely related.
We are seeing the exact opposite of that right now, which probably means we aren't near a top.
Another interesting thing about the latest setup is the fact that the last time we saw a surge in stable coin balances on Exchanges was right before we saw a big move up in the price of bitcoin...
Check it out:
(Source: https://twitter.com/cryptoquant_com/status/1356943679194161152/photo/1)
As you can see, there was a huge spike in stable coin balances on Exchanges in late January, right before the price of bitcoin broke out to the upside in a major way.
Why does this matter?
The reason this matters is because the amount of stable coins sitting on Exchanges very likely represents dry powder, potential buying power.
People don't tend to park stable coins on Exchanges unless they plan to use them to buy something.
While this isn't true for every single coin parked on an Exchange, it's likely true for the majority.
With bitcoin sitting at $48k and a $900 billion dollar market cap, seeing stable coin balances at all time highs as well tells me that we are likely to continue to push higher on bitcoin in the near term.
Once those balances start to fall, that may indicate the price is near a local top.
That fact that not only are the stable coins not dropping, but instead continue to increase at a torrid pace tells me that there is a ton of buying power waiting to jump in on any dips.
For that reason, any dips will likely be shallow and the price of bitcoin and altcoins is likely to continue inflating in the near term.
Stay informed my friends.
-Doc
Posted Using LeoFinance Beta
I somewhat agree with you
Only somewhat?
I am one of the stable coin holders and I will only move on a decent sized dip! Otherwise no cigar.
Yep, it looks like you are not alone in your thoughts. Lot of dry powder there ready to pounce.
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STOPCheck out the last post from @hivebuzz:
Hopefully we get a BIG BART down or something, this is getting boring no volume up here!
I think the more likely next move is a breakout to the upside... once we break $50k convincingly, I think bitcoin starts rallying again. Hopefully it doesn't suck value from alts when it does start moving though.
I don't keep anything on exchanges unless it's very temporary.., a good point.
Yep, exactly. The total supply of stablecoins is a nice metric, but it's the supply on Exchanges that is more important since those other stable coins may not intend to buy in ever.
I actually have the next target at 120k and a correction to about 70k, before going to 200k and beyond... as you often said, corrections of about 20-30% are completely normal and perhaps newcomers find these corrections terrifying and wrongly make the decision to sell.
https://peakd.com/hive-167922/@tobetada/crypto-analysis-or-one-decision-changed-everything
My next target is a lot lower than that before our next 30% correction actually. I am looking in the $60k-$70k range for our next local top before the next significant correction. The price has tended to go up at least 100% from the pullback lows before next correction, and with the last dip to $29k the next target should be somewhere north of $58k, though not that much north. :)
I have been staring to think lately that I should try and hold some more of the stable coins. I don't think I own many if any of them at the current moment. If they keep going down, this might be a good time to pick some up.
Posted Using LeoFinance Beta
The stable coins are there for when you take profits in something, basically a way to go to "cash".
I will have to remember that. I think I am a long way from profits right now!