SSR Reaches New All-Time Low: On-Chain Bitcoin (BTC) Analysis


BeInCrypto takes a look at on-chain indicators for Bitcoin (BTC), more specifically the Stablecoin Supply Ratio (SSR), which has reached a new all-time low.

What is RSS?

The SSR is an on-chain indicator that measures the ratio of the supply of BTC to that of stablecoins. Since the supply of BTC is fixed, just like the price of stablecoins, the indicator changes whenever there is a change in the price of BTC or the supply of stablecoins.

A low value suggest that a significant percentage of the supply of BTC can be purchased by stablecoins. For example, an SSR value of 10 suggests that 10% (1/10) of the BTC supply can be bought by stablecoins, while a value of 5 suggests that 20% (1/5) of the supply can be bought by stablecoins.

Buy signal?

An effective buy signal has been given whenever SSR falls below the lower Bollinger band (black circle). This means that it has deviated downward comparing it to its normal movement.

So far, it has deviated four times. Each of them have been followed by a very considerable upward movement. 

On January 19, the SSR reached a new historically low value of 5.26. However, it has not yet broken below the lower Bollinger Band, although it is very close to doing so.

Therefore, a buy signal has not yet been given.

USDT Balance

The circulating supply of USDT (black) has been on the rise since September 2020. The increase has continued over the past two months and, combined with the falling price of BTC, has been the catalyst for the decline of the SSR.

An interesting observation is the fact that the USDT balance on exchanges is decreasing (red). This usually means that investors are bullish for the future outlook of the market, hence are moving their tokens outside of exchange addresses. 

Additionally, the supply of USDT that is locked into (green) smart contracts is increasing. This contrasts sharply with December, when the reverse was happening.


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