A technical bias conflict in the Bitcoin market is looking to influential on-chain indicators for cues—and most of them are favoring bulls.
Glassnode notes that if the SSR is low, the current stablecoin has more buying power to buy Bitcoin. Conversely, a high SSR reading reflects a brewing selling pressure in the Bitcoin market.
“BTC’s SSR has been declining in 2021 as more stablecoins are minted,” noted Ms. Eichholz in her weekly note to clients. “When SSR is low, this means that there is a large supply of stablecoins relative to BTC, which indicates more buying power ready to flow into BTC and other assets.”
Nevertheless, the firm so far has avoided third-party audits. It remains embroiled in a legal controversy with the New York’s Attorney Journal for allegedly mishandling customers’ funds and not backing its USDT supply with actual dollars.
“No government agency is overseeing Tether and making sure they behave properly, which is why Tether and its sister company Bitfinex have been for years doing whatever they want,” wrote independent journalist Amy Castor.
“Many of these newly minted stablecoins are being deposited onto exchanges, meaning that they are highly liquid and ready to buy up assets such as BTC,” stated Ms. Eichholz.
BITCOIN BULLISH INDICATORS
Other on-chain indicators available at Glassnode shows Bitcoin in a healthy state. They include a tool that tracks BTC balances across the cryptocurrency exchanges. A higher reading shows that more traders are depositing their BTC units to sell them later. Conversely, a lower reading reflects the so-called HODLing sentiment, a meme version of the word “hold.”
“A Bitcoin giga-pump is incoming,” said an independent analyst on Twitter. “Exchanges are facing a Bitcoin liquidity crisis they haven’t seen since the price was $500, they’re running out of supply in their holdings while demand rises.”
On-chain analyst Willy Woo also noticed that the coins that move investors currently are no longer profitable.