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According to a report by Glassnode, bitcoin\u2019s declining stablecoin supply ratio (SSR) indicates an increased supply of newly minted coins on exchanges. In turn, this increase in supply means exchanges are currently \u201chighly liquid and ready to buy up assets such as bitcoin.\u201d<\/strong><\/p>\n As explained in the report<\/a>, the SSR is a ratio of the total value of all bitcoins versus stablecoins. This metric \u201cdecreases when (either) the price of BTC<\/a> is low or when more stablecoins are entering circulation.\u201d<\/p>\n However, with BTC<\/a> prices are already high, this leaves the increased stablecoin supply as the only possible reason behind the low ratio. Already, Messari data<\/a> shows that the total stablecoin market capitalization currently stands at approximately $39 billion as of February 1. From this total, the USDT<\/a> stablecoin accounts for $28 billion or approximately 71% share of the market.<\/p>\n However, as the Glassnode report notes, it is the USDC stablecoin that is seeing \u201cmassive exchange inflows in 2021.\u201d In their commentary on the likely impact of such inflows, the report\u2019s authors say:<\/p>\n The number of USDC on exchanges increased by over 112% in January alone, growing from $431 million to over $915 million. This represents almost $1 billion worth of buying power from USDC alone, poised to move into assets such as bitcoin.<\/p>\n<\/blockquote>\n The authors also explain that \u201cthis high figure should increase investors\u2019 confidence in any dips being quickly bought up, making it a bullish signal.\u201d<\/p>\n Meanwhile, also weighing in with their own bullish commentary is the onchain analyst, Willy Woo. According to Woo\u2019s analysis, profit-taking is now complete, and \u201cthe market has completed a full purge of overheatedness.\u201d<\/p>\n Woo, who uses the spent output profit ratio (SOPR) chart to support his assertion, suggests the crypto market may have gone past the \u201cbearish phase.\u201d He explains that when \u201cSOPR touches the 1.0 line, coins moving between investors no longer carry profit.\u201d<\/p>\n <\/ins> <\/ins> <\/p>\n To bolster this point, Woo explains:<\/p>\n To push SOPR lower, investors would have to be willing to sell at a loss. In order to allow for that, we would need to enter a bearish phase, but this is very unlikely as we are bounded by the $29k price floor.<\/p>\n<\/blockquote>\n At the time of writing, BTC<\/a> was trading above $35,700 handle up 5% on Tuesday.<\/p>\nStablecoin Supply Growth<\/h2>\n
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Profit Taking Complete<\/h2>\n
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