Dormant stablecoin supply ready to impact Bitcoin, SSR Oscillator dips below zero

exchange68September 12, 2024

0 0 1 minute read

Quick Take

For the first time this year, the Stablecoin Supply Ratio (SSR) Oscillator, a derivation of the SSR that measures the movement of its 200-day Simple Moving Average within the Bollinger Bands, has dipped below zero. This implies that a considerable supply of stablecoins is awaiting deployment, seemingly sidelined.

The SSR—a calculation of Bitcoin supply against the combined supply of stablecoins (USDT, TUSD, USDC, USDP, GUSD, DAI, SAI, and BUSD) expressed in BTC—has historically served as a reliable barometer of the supply/demand dynamics between Bitcoin and the US Dollar. A lower SSR indicates a higher “buying power” for stablecoins to acquire Bitcoin, according to Glassnode.

Past data reveals a pattern: a drop in the oscillator often correlates with a local bottom in Bitcoin’s price, hinting towards a potential liquidity shortage. This presents an intriguing scenario for Bitcoin and the broader cryptocurrency market, as unleashing this dormant stablecoin supply could substantially impact Bitcoin’s price trajectory.

Analyst

James Van Straten

Former Lead Analyst at CryptoSlate

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century’s paramount invention.

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.