Pattern Suggests Big Bitcoin Breakout Incoming

#crypto #bitcoin #rally


Crypto analytics firm Santiment says that the dwindling supply of stablecoins may be a sign that a massive Bitcoin breakout is in view”–Paul Ebeling

According to the market intelligence firm, the circulating supply of Tether (USDT) and USD Coin (USDC), the 2 biggest stablecoins by market cap, has been dramatically decreasing since May 2022.

Santiment says that the volume of these 2 assets continues to decline even as the price of Bitcoin rises, which in the past has foreshadowed parabolic BTC rallies, specifically in July 2021 right before the king crypto went from the $29,000 level all the way to $69,000.

“Stablecoin circulation kept going down even on a growing market. We might say that [the] first significant growth happened on a decreasing circulation. Stablecoins tried to heat up strongly, but no, the market didn’t go up.

The best pattern could be [stablecoins] still decreasing [during a] recovering market. Like nowadays. When stablecoins don’t believe in recovery yet, preferring to wait. We’re probably witnessing the same as July 2021 now, at least on two stablecoins.”

Santiment also notes that Bitcoin’s price is now in line with its valuation based on the network value-to-transaction (NVT) model, a metric aiming to gauge an asset’s price based on the ratio between its daily market cap and daily circulation.

“Bitcoin jumped +18% in July after [the] NVT model’s growing bullish divergence in May and June finally saw a price bounce come to fruition. With a neutral signal now as prices have risen and token circulation has declined slightly, August can move either direction.”

Knightsbridge monitors cryptocurrencies as regulations and technology evolve. While some traders have made money on the change in price of Bitcoin or other cryptocurrencies, most investors continue to treat them as a speculative asset primarily for trading with money outside a traditional long-term portfolio.

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Market participants, Brokers and market makers can take a price on any of the linked exchanges to find and execute the best price available. Eventually, as they are on boarded, a broker on the floor of one exchange could directly place an order through Knights rather than going through a broker on another exchange.

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