$BTC: Decreasing 'Stablecoin Circulation' Despite Increase in Bitcoin Price Could Suggest Upcoming Breakout
The decreasing supply of stablecoins circulating could suggest that the flagship cryptocurrency Bitcoin ($BTC) is set to breakout upwards in the near future, based on historical data.
That’s according to cryptocurrency analytics firm Santiment, which noted in a new report that the circulating supply of leading stablecoins Tether ($USDT) and $USDC has been decreasing since May of this year.
While the cryptocurrency space endured a significant sell-off at the beginning of the year, as the market started recovering volumes for these stablecoins kept on declining, which in the past has foreshadowed significant BTC price rallies. In July 2021, as Daily Hodl reports, the same pattern emerged before BTC jumped from around $29,000 to a new all-time high near $69,000.
Santiment wrote that while these stablecoins saw their circulating supply go down “even on a growing market,” when these “tried to heat up strongly” the market did not go up significantly, instead, the “best pattern” would be stablecoins decreasing during a “recovering market.”
Separately, in a tweet, Santiment noted that Bitcoin’s price jumped 18% in July after its network value-to-transaction (NVT) metric, which gauges an asset’s fair value based on the ratio between its daily market capitalization and circulation, saw a bullish divergence in May and June.
As CryptoGlobe reported, Bloomberg Intelligence analyst Mike McGlone has suggested that the flagship cryptocurrency Bitcoin ($BTC) could “outperform” other assets in the second half of the year as it moves “toward global collateral” with performance aligned to that of Treasury bonds or gold.
McGlone noted that Bitcoin “may be regaining its propensity to outperform in H2” as he believes that a series of factors in wider equities and commodities markets may “coincide with a bottoming crypto.”
The analyst said that in the second half of the year the view “for what have been enduring bull markets in Bitcoin and bond futures could come down to the fact that they just don’t get much colder,” and noted that BTC has been “one of the fastest horses in the race since it’s inception about a decade ago.”
To McGlone, “more of the same” is expected ahead as Bitcoin “may be transitioning toward global collateral, with performance more aligned with Treasury bonds or gold.” In a separate tweet, McGlone noted that the “lowest-ever Bitcoin volatility vs. the Bloomberg Commodity Index (BCOM) may portend a resumption of the crypto’s propensity to outperform.”
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