Stablecoins Signal Forceful Bitcoin Demand: Could BTC Renew Its ATH Soon?

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Recent activity in Bitcoin price and demand indicators suggests a potential boost in interest in the market, which could lead to an all-time high again.

So far, Bitcoin has recently achieved a significant price rebound, regaining trading levels above $70,000 after a sustained period of resistance just below that price. This uptrend follows a 5% boost over the last 24 hours, which puts Bitcoin at $71,933 at the time of writing.

One factor driving this growth is increased demand reflected in stablecoin movements, an indicator often used to gauge market sentiment and potential Bitcoin buying, CryptoQuant analyst BinhDang highlighted this in a recent report post on the CryptoQuant QuickTake platform.

The Stablecoin supply ratio oscillator reflects the boost in demand

BinhDang highlighted that the Stablecoin Supply Rate Oscillator (SSRO) has reached levels previously seen during Bitcoin’s lows, especially those seen in November 2022.

The analyst noted:

Since Bitcoin bottomed in November 2022, the 90-day and 200-day oscillators have recorded lows similar to this bottom within 3 months of Q3 2024.

It is worth noting that the SSRO tool, which measures the ratio of Bitcoin’s market capitalization to that of leading stablecoins such as USDT, USDC, BUSD and others, is a barometer for tracking Bitcoin demand versus stablecoin supply.

The oscillator measures the degree to which stablecoins, commonly used for Bitcoin purchases, flow into Bitcoin, thereby signaling buying interest.

When the oscillator shows low values, as it did during Bitcoin’s November 2022 low, it means that stablecoins are more likely to be converted into Bitcoin, increasing demand.

This trend has pushed Bitcoin above the $70,000 mark, encouraging investor sentiment and speculation about potential future highs.

Modern Bitcoin ATH on the horizon?

According to BinhDang, BTC may continue to grow if demand remains stable and in line with favorable macroeconomic data or forecasts for the upcoming elections. BinhDang wrote:

SSRO indicates high demands on the average quarterly data set (90 days), exceeding positive 2 points. If demand continues and the announcements and news from early November contain favorable macro data and elections, a move towards and breaking through positive 3 points is possible.

The analyst notes that the boost above the positive three-point SSRO level has coincided with mighty growth cycles in previous periods, particularly in January 2023, October 2023 and February 2024.

While the price of BTC has been steadily rising in recent days, reaching almost $72,000 today, the asset’s daily trading volume is showing the same trend.

In particular, data from CoinGecko shows that over the last 7 days, Bitcoin’s 24-hour trading volume has increased from under $35 billion, as seen last Tuesday, to a whopping $51.6 billion.

Bitcoin (BTC) price chart on TradingView

Featured image created with DALL-E, chart from TradingView

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