The recovery indicates capital has been flowing from stablecoins into bitcoin, Glassnode tweeted Thursday.
They are essentially proxies for fiat currencies, offering a price-stability advantage that other digital assets do not have, and are widely used to fund crypto purchases.
“When the ratio is low, the buying power for bitcoin is high, as the same amount of USD can buy relatively more BTC.
The stablecoin supply ratio oscillator helps traders identify extreme readings on the SSR and any impending trend change.
For example, bitcoin’s previous bull runs, including the one seen in the final quarter of 2020, kicked off with a below -2 reading on the oscillator.
Bitcoin is currently trading near $33,560, representing a 3% drop on the day.
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