Bitcoin Prospects Strengthen as Stablecoin Metrics Fall

Bitcoin (BTC) has quickly recovered to around $60,000 following the fiasco that pushed prices below $50,000 last week.

Now, the metric that measures the number of BTC held in wallets connected to centralized exchanges compared to stablecoins shows that selling pressure is decreasing.

The rate fell to its lowest level since February 2023, extending a prolonged downtrend that began in June last year, according to data tracked by blockchain analytics firm CryptoQuant.

According to CryptoQuant, traders are inclined to hold on to their bitcoins as they expect the price to increase in the future.

According to charting platform TradingView, the total supply of tether (USDT) and USD Coin (USDC), the two largest stablecoins by market cap, has increased by nearly $2 billion to $150.15 billion since the market crash on Aug. 5. On an annual basis, the total supply of USDT and USDC is up almost 30%.

The development is consistent with constructive criticism reported by some analysts.

Valentin Fournier, analyst at digital asset research firm BRN, said: “Spot ETFs saw positive net flows yesterday. BTC (+$28m) and ETH (+$5m) saw institutional support after the weekend decline. This provides some resilience in times of fear and potentially helps reduce bitcoin’s volatility over the long term. Yesterday, the $58,500 level we mentioned held strong and bitcoin rose above $60,500 before falling back to $59,500.”

“Momentum is low but remains positive as we predicted. We see Bitcoin approaching the upper trend of the current range ($67,000 to $69,000) in the coming weeks.”