Mithat Can Kartlaşmış 
Stablecoin On-Chain Analysis on-chain data shows that the stablecoin exchange supply ratio (SOV) and stablecoin exchange net inflow (SNA) values are on the rise. SOV represents the ratio of the amount of stablecoins held on exchanges to the total amount of stablecoins, while SNA shows the difference between the amount of stablecoins that enter and exit exchanges in a day.
You might like: Circle CEO’s Perspective – Cryptocurrency Regulations in 2024
The SOV value has reached its highest level since June 2020. This indicates that the amount of stablecoins held on exchanges is increasing. The SNA value is also at its highest level since July 2023. This indicates that the amount of stablecoins entering exchanges is greater than the amount leaving.
These developments indicate that stablecoins are mostly being brought into the market by individual investors. Individual investors often use stablecoins to reduce volatility in the cryptocurrency markets. Therefore, the increase in stablecoin supply could lead to a relative decline in the bitcoin price.
The bitcoin price has been on a downward trend in recent months. This indicates that individual investors are avoiding risk and turning to stablecoins. If this trend continues, a local bottom could form in the bitcoin price.
Of course, the increase in stablecoin supply does not necessarily mean that the bitcoin price will fall. However, it does increase the likelihood of a decline.
Recommendations for Investors (Stablecoin On-Chain Analysis)
Taking into account that the increase in stablecoin supply could lead to a decline in the bitcoin price, investors can take the following precautions:
- Monitor the bitcoin price closely.
- If the bitcoin price starts to trend downward, reduce or close your positions.
- If you want to invest in stablecoins, make a long-term investment plan.
The increase in stablecoin supply is a significant development for the bitcoin markets. We will see how this development affects the bitcoin price in the coming days. Stablecoin On-Chain Analysis helps us to understand what will happen in such situations in the future!