The total supply of stablecoins has sky-rocketed to the $9 billion mark, effectively surpassing the total market capitalization of XRP at $8.7 billion.
The increase in USDT (Tether) volume has been particularly strong, with 54% supply surge since March. The total supply issued to Tether has increased to $7.516 billion. This is been by far the steepest rise in the supply of USDT.
The increase in volume of USDT can be attributed to the increasing demand of US Dollar around the world as the world reserve currency. Notably, the weekly net inflow of USDT to crypto exchanges (7-day average on the chart) has been quite strong despite the drop and bearish sentiments in the market.
The average balance of USDT on exchanges has increased by nearly 200% (from $500 million to above $1.5 billion since March). Crypto analyst and trader, Light (alias) tweeted,
“Tether exchange balances ballooning as potential BTC supply available to be acquired on exchanges is falling:” He added, “The supply-demand squeeze continues to tighten.”
Moreover, the dip in the average of Bitcoin [BTC] from exchanges indicates a greater inclination towards increased holding. While futures traders continue to fear a short squeeze similar to May 2019 to occur again, a supply-demand squeeze on exchanges could usher a new bullish phase as well.
Ushering a New Bull Market?
The SOPR (Spent Output Price Ratio) indicator has reached a critical point of conjecture if we Bitcoin were to establish a new bull run.
The number of Bitcoin [BTC] addresses with 0.01 BTC – 1 BTC has been reaching new highs with every passing week. Hence, we are likely witnessing strong retail demand for Bitcoin [BTC] near halving. However, the number of addresses with more than 10 BTC saw a considerable drop in the days following the crash, which could be a worrying signal for the bulls.
Do you think the bears have capitulated completely or downside probability is still strong? Please share your views with us.
from Coingape https://coingape.com/bitcoin-tether-exchanges-balance/
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