Stablecoins Reserve Surges Up Again, Dry Powder For Bitcoin’s Next Big Move?

Keshav Verma

1 year ago

3 mins read

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Data shows stablecoins volume has surged up once again. Past pattern may suggest that this accumulation could be dry powder for Bitcoin’s next big move.

Bitcoin Stablecoins Reserve Rises Up Again

As pointed out by an analyst in a CryptoQuant post, the stablecoins reserve seems to have risen again back to peak levels.

The stablecoins reserve is an indicator that shows the total amount of stablecoins being held on wallets of all exchanges

When the value of this indicator moves up, it means investors could be moving out of volatile crypto markets, and into the stable fiat tokens.

High values can imply investors are piling up these coins while waiting to find the optimal openings into markets like BTC.

Related Reading | Why Bitcoin Bears Might Not Get To Buy New Lows

On the other hand, when the metric’s value shows a downtrend, it could mean investors have started to move their funds from stablecoins back into volatile markets. Large volumes moving out to exchanges and into personal wallets will also register as a decrease in the reserve.

Now, here is a chart showing the latest trend of the indicator vs the Bitcoin price:

Stablecoins reserve has once again hit a peak | Source: CryptoQuant

As the above graph shows, the metric has once again shown an uptrend recently as its values reach up near the peak again.

Lately the trend this year has been that whenever stablecoins reserve shoots up, it means an accumulation of dry powder for Bitcoin. And when the indicator goes back down, these fiat tied coins are converted to BTC, showing up as a rise in the crypto’s price.

This trend can be seen in action in the above chart as well. When BTC hit a bottom due to the El Salvador day crash, stablecoins started dropping off quickly as BTC’s price recovered back to a higher level.

Once the price hit a peak, the reserve started going up once again as investors took the profits of the price increase and moved into fiat-tied tokens.

Now the stablecoins reserve has plateaued at a peak again. This may mean investors are just waiting to put their coins back in once the price is suitable.

Perhaps once Bitcoin gets pumped through these coins, it will be able to make a big move up again. The analyst in the post believes this could be one of the keys to hitting a new ATH.

BTC Price

At the time of writing, Bitcoin’s price floats around $43.5k, up 0.2% in the last seven days. The below chart shows the trend in the coin’s value over 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

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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