Chain data shows that stablecoins reserve has reached a new all-time high (ATH), which is what it could mean for the price of Bitcoin based on past patterns.
Stablecoins All Exchange Reserve Reaches New ATH
As CryptoQuant pointed out post, the reserve of all exchange stablecoins grew and reached a new ATH. A past pattern of the indicator could help predict how the price of Bitcoin will move later.
The reserve of all exchange stablecoins is a metric that measures the amount of stablecoins present in all centralized exchanges.
As the value of this indicator grows, it means that more stability currencies are being sent to exchanges to buy other currencies like Bitcoin, or investors are withdrawing from volatile markets to fiat.
A drop in the stablecoins reserve would imply that these coins are transferred to personal wallets or converted to another cryptocurrency like BTC.
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Now, here is a chart that will reveal how the all exchange stablecoins reserves line up against the BTC price:
The all exchanges stablecoins reserve shoots up | Source: CryptoQuant
Examining the graph above, two interesting features can be seen. The first is that the stablecoins stock seems to explode when the price of Bitcoin reaches bottom.
The behavior makes sense, as avid investors would want to change their positions in the market in response to the low trend in the price.
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The other feature is that soon after the spike occurs, the stablecoins reserve decreases and the price of BTC starts to increase.
This trend has occurred twice so far this month. If it really is a pattern, then the price of Bitcoin should rise now, at least soon, as the indicator shows a huge acceleration at the moment.
At the time of writing, the price of Bitcoin is around $ 46.9k, up 2.5% in the last 7 days. Over the past month, the cryptocurrency has accumulated 22.8% in earnings.
The diagram below shows the trend in the price of BTC over the last 5 days:
Bitcoin's price continues to fall downwards | Source: BTCUSD on TradingView
Yesterday, BTC started a very sharp upward trend as the cryptocurrency went from $ 47k to $ 49k earlier today. However soon after that the crypto sharply fell in price before it could retest the $ 50k level. This time. the value affected up to $ 46k.
The price action would suggest at least a short-term bear market, but if the stable reserve pattern holds, the value of Bitcoin could soon rise as investors use these linked currencies to buy the BTC dip.
Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com