According to crypto analytics firm Santiment, the dwindling supply of stablecoins could signal that a massive Bitcoin (BTC) explosion is on the horizon.
The circulating supply of the two largest stablecoins by market cap, Tether (USDT) and USD Coin (USDC), has been falling sharply since May 2022, according to the market intelligence firm.
Santiment represents the quantity of these two assets continue Bitcoin prices will fall even as they rise, which has heralded a parabolic BTC rally in the past, especially in July 2021, just before the king cryptocurrency went all the way from $29,000 to $69,000.
“Even in a growing market, stablecoin circulation continues to decline. We might say [the] The first significant increase occurred with a decrease in circulation. Stablecoins tried to heat up strongly, but no, the market did not rise.
The best model is probably [stablecoins] still decreasing [during a] Market recovery. Just like now. When stablecoins don’t yet believe in a recovery, prefer to wait. We may now be witnessing the same thing as July 2021, at least on two stablecoins. “
Santiment also noted that Bitcoin’s price is now in line with its valuation based on the Network Transaction Value (NVT) model, which is designed to measure the price of an asset based on the ratio between the asset’s daily market capitalization and daily circulating supply.
“Bitcoin up 18% in July [the] The NVT model’s widening bullish divergence in May and June finally materialized for a price rally. With prices rising and token circulation falling slightly, there are now neutral signals that August can go either direction. “
At the time of writing, Bitcoin was changing hands at $23,297, down 1.25% on the day.
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