Cryptocurrency analytics firm Alphractal has issued a bull signal to Bitcoin, citing key indicators that suggest the optimal accumulation stage is approaching.
In a recent statement, the company provided important information about the Stablecoin Rate channel, a metric that historically identifies strong Bitcoin and altcoin purchase opportunities.
Alphractal noted that the total market capitalization of Stablecoins has steadily increased due to new issuances and capital turnover from Altcoins to stable assets. This increase plays an important role in determining Bitcoin market trends.
“When Stable Coin reaches the bottom dotted line of the rate channel, it has historically been a great entry point for investors,” said an analyst at the company. “This pattern suggests that there are a significant amount of stubcoins in the market compared to Bitcoin’s market capitalization, which often occurs before Bitcoin’s price has fallen and recovers.”
The Stablecoin Rate channel (long-term) is designed to smooth short-term volatility using a 90-day relative strength index (RSI) applied to Stablecoin Supply Ratio (SSR) oscillators and further refine it with a 7-day exponential moving average (EMA).
The main components of an SSR oscillator include:
- Stablecoin Supply Ratio (SSR): This is calculated by dividing the Bitcoin’s market capitalization by the Stablecoin’s market capitalization, and smoothes further with a 200-day simple moving average (SMA).
- Bollinger Band Analysis: ±2 standard deviation bands help to identify excessive conditions that are overbought.
Oscillator signal:
- Green light: Low oscillator values, usually corresponding to main bottom signals.
- Red light: High oscillator values indicating changes in potential market trends.
An alfractal chart showing stable coin rate channel data over time.
Although the exact timing remains unknown, Alphractal explained that the current setup is very similar to the previous accumulation zone that preceded the price rise of Bitcoin. “The main purchase signal has not yet been realized, but based on historical trends, we are rapidly approaching the ideal accumulation stage,” the statement said.
*This is not investment advice.
