Bitcoin Stablecoin Supply Ratio Is Approaching A “Buy” Signal

Keshav Verma

Last Updated: June 11, 2024 2:23 pm

3 mins read

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On-chain data shows the recent trend in the Bitcoin Stablecoin Supply Ratio may suggest the crypto could see a buy signal soon.

Bitcoin Stablecoin Supply Ratio RSI 14 Is Near A “Buy” Signal

As explained by an analyst in a CryptoQuant post, whenever the SSR RSI has gone below a value of 25 during recent years, the crypto has observed a buy signal.

The “Stablecoin Supply Ratio” (or SSR in brief) is an indicator that measures the ratio between the market cap of Bitcoin, and that that of all stablecoins.

As their name implies, “stablecoins” are quite stable in their value as they are usually tied to fiat currencies. Because of this, investors in the crypto market shift their coins into them in times when they want to escape the volatile markets.

This can build up a reserve in the form of stablecoins that can be readily deployed into cryptos like Bitcoin whenever investors feel the prices are right to jump back in.

When the value of the SSR is low, it means the stablecoin market cap is high right now. This suggests there is a large amount of stablecoins piled up currently, which can act as buying pressure for cryptos like Bitcoin, and hence can be bearish for their prices.

On the other hand, the SSR being high can imply the stablecoin market cap is lesser in comparison to the BTC one at the moment. Such a trend suggests there isn’t much dry powder that can support other coins and therefore could either be neutral or bearish for their prices.

Now, here is a chart that shows the trend in the SSR RSI 14 over the the last couple of years:

The value of the metric seems to have been going down recently | Source: CryptoQuant

The “Relative Strength Index” (RSI) records the rate of change in any quantity, which in this case is the Bitcoin SSR. In the above graph, the quant has marked the relevant zones of trend for this indicator.

It looks like whenever the SSR RSI 14 has attained values above 75, the price of the crypto has observed a sell signal. While the metric reaching values lower than 25 has instead acted as a buy signal.

Recently, the indicator’s value has been going down and is now near the 25 threshold. However, the buy signal hasn’t formed just quite yet so it remains to be seen whether the metric continues this trend and breaches the 25 level or not.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.7k, down 7% in the past week.

Looks like the crypto's value has gone down | Source: BTCUSD on TradingView

Featured image from Aleksi Räisä on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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