Bitcoin [BTC] and USD Tether Balance on Exchanges Signal a Bull Run: Analyst


bitcoin usdt balance signal a bull run
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Bitcoin [BTC] and USD Tether Balance on Exchanges Signal a Bull Run: Analyst

The total supply of stablecoins has sky-rocketed to the $9 billion mark, effectively surpassing the total market capitalization of XRP at $8.7 billion.

The increase in USDT (Tether) volume has been particularly strong, with 54% supply surge since March. The total supply issued to Tether has increased to $7.516 billion. This is been by far the steepest rise in the supply of USDT.

stablecoin supply metrics
Stablecoin Supply in the Markets (Source: Coinmetrics)

The increase in volume of USDT can be attributed to the increasing demand of US Dollar around the world as the world reserve currency. Notably, the weekly net inflow of USDT to crypto exchanges (7-day average on the chart) has been quite strong despite the drop and bearish sentiments in the market.

usdt net inflow
Net Crytpo Exchange Flow of USDT (Source)

The average balance of USDT on exchanges has increased by nearly 200% (from $500 million to above $1.5 billion since March). Crypto analyst and trader, Light (alias) tweeted,

“Tether exchange balances ballooning as potential BTC supply available to be acquired on exchanges is falling:” He added, “The supply-demand squeeze continues to tighten.”

Moreover, the dip in the average of Bitcoin [BTC] from exchanges indicates a greater inclination towards increased holding. While futures traders continue to fear a short squeeze similar to May 2019 to occur again, a supply-demand squeeze on exchanges could usher a new bullish phase as well.

Ushering a New Bull Market?

The SOPR (Spent Output Price Ratio) indicator has reached a critical point of conjecture if we Bitcoin were to establish a new bull run.

sopr ratio
Bitcoin [BTC] Spent Output Ratio (SOPR) Indicator (Source)
The ratio is close to 1 at the moment, if the price continues to consolidate above current levels, a new bull market will begin. Nevertheless, if we see rejection below 1, the bear market will continue to linger.

The number of Bitcoin [BTC] addresses with 0.01 BTC – 1 BTC has been reaching new highs with every passing week. Hence, we are likely witnessing strong retail demand for Bitcoin [BTC] near halving. However, the number of addresses with more than 10 BTC saw a considerable drop in the days following the crash, which could be a worrying signal for the bulls.

Do you think the bears have capitulated completely or downside probability is still strong? Please share your views with us.  

Author: Nivesh Rustgi
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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Nivesh Rustgi 1180 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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