On-chain data shows that the RSI of Bitcoin’s stablecoin supply ratio (SSR) has fallen to a low of 13, indicating that stablecoin supply is high compared to the world. $BTC Market capitalization.
Bitcoin SSR RSI has fallen sharply recently
In a new post on X, CryptoQuant analyst Maartunn discussed the latest trends in Bitcoin SSR RSI. “SSR” is an on-chain indicator that measures the ratio to market capitalization. $BTC Total valuation of all stablecoins.
A stablecoin is a digital asset whose price is pegged to a fiat currency and serves a different purpose in this space than volatile assets such as: $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 return to the world eventually. $BTC And when they get other coins, they swap stables to support them. For this reason, stablecoins are often seen as representing potential “dry powder” that sidelines the volatile aspects of the sector.
SSR tracks Bitcoin’s market capitalization relative to these assets, so it essentially tells us how the value of the number one cryptocurrency compares to this dry powder. In the context of the current topic, the SSR itself is not directly relevant, but rather its relative strength index (RSI), a momentum oscillator that tracks the magnitude and speed of recent changes in an indicator.
Here is a chart shared by Maartunn showing the trend of Bitcoin SSR RSI over the past few years.
As shown in the graph above, Bitcoin SSR RSI has recently witnessed a noticeable drawdown and has entered the “undervalued” zone. This means that SSR has fallen enough that we could see a rebound. Currently, this indicator stands at a value of 13, which is quite low compared to the past. “Relative to Bitcoin’s market capitalization, much of the liquidity in stablecoins is on the sidelines,” the analyst said.
This low arrived as $BTC and other assets observed steep bearish trajectories. It is currently unclear whether investors will begin to bring their excess stablecoin capital into the market to purchase at these lower prices, potentially helping to stabilize the asset.
In other news, Bitcoin’s recent decline means that a large amount of supply has entered a loss state. As Maartunn highlighted in another X post, 52% of the circulating cryptocurrency supply is currently underwater.
$BTC price
At the time of writing, Bitcoin is hovering around $62,700, down nearly 10% over the past seven days.
