The data shows that the volume of stable coins has increased again. Past patterns may suggest that this deposit could be a dry powder for Bitcoin’s next big move.
Bitcoin Stablecoin reserves rose again
As directed by an analyst in a Crypto Quant Post, stable reserves appear to have risen to the top again.
Stablecoin reserve is an indicator that all exchanges have stable coins in their wallets.
When the value of this index rises, it means investors can exit the volatile crypto market and move to stable fiat tokens.
Investors are depositing these currencies as higher values can mean while waiting for the best opening in a market like BTC.
Related Reading | Why Bitcoin Bears Can’t Buy New Low
On the other hand, when the value of the metric shows a downward trend, it could mean that investors have started sending their funds back from stable currency to volatile markets. Large volumes in exchanges and personal wallets will be registered as reserve reductions.
Now, here is a chart that shows the latest trends of the indicator against the price of Bitcoin:
Stablecoins reserve has once again hit a peak | Source: CryptoQuant
As the graph above shows, the metric has once again shown a trend recently as its values have again reached near the peak.
The recent trend is that whenever the stablecoin reserve increases, it means that dry powder is accumulated for bitcoin. And when the index goes down again, these Fiat tied coins are converted to BTC, which shows up as the price of crypto increases.
This trend is also seen in the chart above. When the BTC hit the bottom due to the El Salvador day crash, the stablecoins began to decline rapidly as the price of the BTC returned to higher levels.
Related Reading | Will the SEC approve a Bitcoin Futures ETF in 2021? There are effects here
Once the price reaches the peak, the reserves start to rise again as investors take advantage of the price increase and move on to Fiat-bound tokens.
Now the stablecoin reserves have reached a peak again. This may mean that investors are waiting to return their coins only if the price is reasonable.
Perhaps once Bitcoin is pumped through these coins, it will be able to take a big step again. Post analysts believe this could be one of the keys to hitting a new ATH.
At the time of writing, the price of Bitcoin has risen 0.2% in the last seven days, close to $ 43.5k. The chart below shows the trend of currency prices in the last five days.
BTC's price heading on path of recovery from the crash due to China's crypto ban | Source: BTCUSD on TradingView