On-chain data shows the RSI of the Bitcoin Stablecoin Supply Ratio (SSR) has dropped to a low of 13, a sign that the stablecoin supply is high relative to the BTC market cap.
Bitcoin SSR RSI Has Sharply Gone Down RecentlyStablecoins, digital assets that have their price pegged to a fiat currency, serve a different purpose in the sector than volatile assets like BTC. Generally, investors store their capital in the form of stablecoins whenever they want to avoid the volatility associated with other cryptocurrencies.
These holders tend to eventually venture back into BTC and other coins, and when they do, they swap their stables in favor of them. Because of this, stablecoins are often looked at as a representation of the potential “dry powder” waiting on the sidelines for the volatile side of the sector.
Now, here is the chart shared by Maartunn that shows the trend in the Bitcoin SSR RSI over the last few years:
As displayed in the above graph, the Bitcoin SSR RSI has witnessed a notable drawdown recently and has entered into the “undervalued” zone. This means that the SSR has declined enough that it may be probable to see a rebound. Currently, the indicator is sitting at a value of 13, which is quite low when compared to the past. “There’s a lot of stablecoin liquidity sitting on the sidelines relative to Bitcoin’s market cap,” noted the analyst.
This low has arrived as BTC and other assets have observed a steep bearish trajectory. It now remains to be seen whether investors will start deploying the excess stablecoin capital into the market to buy at these lower prices, potentially helping the assets stabilize.
At the time of writing, Bitcoin is floating around $62,700, down nearly 10% in the last seven days.
