The Bitcoin price index signals a rise to $ 15K following the US election

A new report says Bitcoin has support to climb to $ 15K if historical trends repeat this year.

Compiled by crypto index fund provider Stack Funds on October 15, the report highlights Bitcoin’s market cap versus real capital ratio (MVRV) driving up momentum, possibly breaking resistance. $ 12K.

The report expects MVRV to “make a significant breakthrough”

Bitcoin has yet to break $ 12K, due to being rejected at $ 11,700 this week. However, that development does not detract from analyst optimism with a belief of $ 11,000 providing solid support.

Also, in the coming months, the period after the US Presidential election in early November could lead to more volatility.

For Stack Funds, this depends a lot on the MVRV rate, currently at 1.8, and there are signs that a 2.5 retest came out of 2019, when BTC / USD reached $ 13,800. The report states:

“The current MVRV rate is 1.8 and well supported by the trend line where Bitcoin bottomed out at the end of 2018. The trend is also drawing a similar trajectory as it happened during the 2017 bull run, in which dynamic The steady upward move has repeatedly tested the same support trend line. With strong support, we are expecting a significant breakout of 2.0 in the near term as it looks set to retest (retest) a 2019 high of 2.5, bringing Bitcoin price above $ 15K. .

MVRV is the metric invented by analysts Murad Mahmudov and David Puell, who are also the creator of Bitcoin’s Puell Multiple index. MVRV uses market cap versus real capital generated by CoinMetrics, to price Bitcoin more accurately than traditional market cap.

Since the end of 2018, MVRV has been in a wide uptrend and was only broken when assets plunged due to the Corona virus epidemic in March 2020.

Bitcoin MVRV Rate Highlights Uptrend | Source: Stack Funds / CoinMetrics

Organizers increased buying Bitcoin with a positive sentiment

Stack also notes a growing institutional interest in Bitcoin with a certain bullish future price sentiment.

Stone Ridge invested $ 115 million after Square bought $ 50 million, both of which were noticed by MicroStrategy’s more than $ 425 million investment.

Bitcoin futures OI is also on the rise this month, signaling an increase in institutional activity once again. The Stack report explains:

“We think repositioning is happening in the market with possible changes in this economic environment, as futures and OI volumes begin to recover. We watch key resistance at $ 12K, as we anticipate further consolidation around the current levels during the election and a subsequent bullish breakout. ”

Analyst: Bitcoin is likely to drop as the US presidential election approaches

Bitcoin is in danger of extending its ongoing bearish correction as it breaks below the line of ascending support line drawn from March 2020. On September 30, the BTC / USD pair fell below this line and flip it into resistance.

Recently, the price has re-tested this line twice to find a breakout, with no success.

The analyst on TradingView also spotted a descending trend line on the US dollar index (DXY) chart. He notes that the index’s recent rally pushed the price above this line and turned it into support.

DXY then re-tested this line twice, similar to how Bitcoin tried to climb above its ascending support line on twice.

“From a [pure] technical point of view, we can see that Bitcoin has broken below the ascending support line, and is in the process of retesting this line for the second time. While DXY is also testing it. level of support for a second time. With all that considered, we can assume that Bitcoin will have some correction in the near term. ”

Fundamental principles also agree

The macro fundamentals have been supporting Bitcoin’s bearish momentum in the near term, the analyst added.

He noted that increased volatility in the stock market ahead of the US Presidential election on November 3 would fuel greater demand for the US dollar. Despite Bitcoin’s safe-haven state, people will want to keep cash more than anything else. Part of the reason is also the close correlation between cryptocurrencies and US stock indices.

“For example,” explained the analyst, “the COVID19 incident has caused the dollar to rise strongly, this is due to investors’ preparations for a possible recession caused by this pandemic ( stocks also plummeted). After the miraculous rebound, we saw the US Dollar slowly falling and a clear recovery in the stock market, taking Bitcoin with it.

That increases the likelihood of Bitcoin consolidating or correcting lower in the coming sessions.

The long-term trend of Bitcoin

Other analysts expect Bitcoin to rebound strongly after US election season. One of the main reasons why cryptocurrencies remain in the grip – according to them – is the absence of a second corona virus stimulus.

The dollar’s inflationary outlook has spurred mainstream companies to allocate their cash to Bitcoin. Recently, Square, Microstrategy, and several other companies have invested hundreds of millions of dollars in the cryptocurrency market.

Bitcoin transaction behavior that you need to pay attention

The pandemic is considered a tipping point for Bitcoin, however, after hitting a high of $ 12,000 in August, Bitcoin’s price has caused retail traders to stall. Based on Bitcoin’s market cycle, we are in an accumulation phase and the price could move higher in the next few weeks, however, the reaction of institutions and retail traders has a big effect on it.

When you run rocket gifs, bullish tweets, and headlines like – Bitcoin will hit $ 400,000, you know it. You know you’re crossing the threshold of change, maybe headed for a different one! There is enough pressure on retail traders from uncertainty and volatility in the cryptocurrency market.

Bitcoin price is up 7.2% in a week and 10% in 30 days. With this leap forward, there are mixed reactions on Crypto Twitter.

Source: Twitter

“I think we filled those gaps in the low $ 11k zone before we got much higher ($ 13k territory). But I told myself that I would make an excuse to play the dragon just because the high PNL would terrify me, which is exactly what was happening. There are two wolves inside of me ”.

Keeping a little longer comes at its own risk. Bitcoin’s 60-day volatility is currently at 5.04%, a month ago at 10.9%.

Bitcoin’s 60-Day Volatility | Source: Woobull

Based on data from Bitcoin’s 60-day chart, it took less than 30 days for volatility to double or drop below half. Currently, the price is above the 200-day MA and the Mayer Multiple is at its lows. However, this can change overnight, if the inflow of money into exchanges increases through mining pools or whales. When the price crosses $ 10k, 83% of HODLer is expecting unrealized profits, at $ 11.4k there is 89% with unrealized profits.

In such a volatile environment, a conformist can go on, while an objection may decide to take profits before rejoining.

The reward / risk ratio is skewed in Bitcoin, however, trading in alts can bring more benefits. Every alt rally has a single altcoin leading, and that’s where most of the profits are recorded. During the historic price rally in 2017, it was XRP and this time the possible candidates were LINK and BCH. LINK is up 21.02% in a week and BCH is right behind with 13.45%.

Source: Coinmarketcap

If opening new positions on Bitcoin is too stressful, then two-digit profitable altcoins could be the next best bet. XRP increased from $ 0.25 to ATH of $ 3.84. This 1400% price increase could be reflected in the next rally. LINK, ADA and ETH continue to rise and based on DOT returns over 24 hours, XRP could become a competitor in the coming weeks.

Multiple data points suggest Bitcoin’s similar 2017 bull run has begun

Social sentiment data, strong fundamentals, and on-chain analysis show Bitcoin is on the verge of a 2017 bull run.

Last week, Bitcoin saw a 6.95% increase in price, up from $ 10,804 on October 5 to $ 11,555 on October 12. The surge marks the best performing week for Bitcoin since July, and the data shows notable changes in market sentiment around the digital asset.

According to data from The Tie, an alternative data provider for digital assets, the daily sentiment score for Bitcoin has reached 62.4. The metrics of Twitter chats to determine positive or negative sentiment in the market and any point above 50 imply that market sentiment is positive.

Bitcoin vs. Price affection. Source: The Tie

Bitcoin and the rest of the crypto industry endured a huge amount of negative news in early October. CFTC and DOJ cracked down on BitMEX, accusing the company of running the derivative exchange. was illegal on October 1, and the UK FCA banned retail cryptocurrency derivatives on October 6.

However, neither of these events produced negative results as many investors thought. Furthermore, negative news is followed by upbeat stories like Square allocating 1% of its assets to Bitcoin.

Overall, bullish signs continued to come for Bitcoin, and as it rose to $ 11,500, total market cap jumped 6% from $ 339 billion to $ 359.

Furthermore, a recent Finder report surveying more than 30 panelists, including eToro commentator David Derhy, CEO of Alpha5, Vishal Shah and LMAX Group currency strategist Joel Kruger, found that Bitcoin will reach $ 14,283 by the end of 2020.

Blockchain activity is emotional

Many on-chain metrics also fit in with the positive sentiment surrounding Bitcoin. While investor activity is on the rise, prices have yet to follow. According to crypto analyst Willy Woo, this signals an increase in “investor activity”, an activity that has not yet been counted towards the price of Bitcoin. Woo said:

” Investor activity “is determined based on on-chain volume. This is because as Bitcoin moves between wallets of two different participants, we assume that there is already an off-chain payment (fiat or alt-coin). It is an imperfect measure, but close to what’s going on.

NVT Bitcoin (Transaction volume vs. price) | Source:

Not only is activity increasing, but the number of coins held on exchanges is steadily decreasing, the trend changing like the accumulation period that occurred before the bull market of 2017.

As both fundamental and technical analysis paint a bullish picture amid current political and financial volatility, a perfect storm appears to be accumulating for Bitcoin.

DeFi is slowly recovering

By 2020, DeFi will play a key role in reviving the excitement surrounding cryptocurrencies and ETH price. But in the past two months, the majority of DeFi tokens have lost value.

Data from DeFi Pulse shows that the total value locked up in DeFi is $ 11.33 billion. Meanwhile, Uniswap has a total value of $ 2.7 billion locked and decentralized exchange (DEX) has continued to see a steady increase in trading volume.

Total locked values ​​in DeFi | Source: Digital Assets Data

According to data from Flipside Crypto, around $ 300 million in tokens are being sent to DeFi dapps every day. This is far ahead of centralized exchanges (CEX) that are currently seeing daily cash flows of around $ 156 million.

Uniswap alone is currently responsible for 70% of DeFi cash flow, with $ 211 million going to their liquidity pool each day.

All activities of the Ethereum network | Source: Flipside Crypto

The development of DeFi protocols has brought new attention to Bitcoin, and so far, more than $ 1.1 billion worth of Bitcoin has been encrypted on the Ethereum blockchain only through Wrapped BTC (WBTC).

Flipside Crypto notes that around $ 385 million wBTC and renBTC changed hands in September.

Significant hurdles are ahead

While many factors move toward an eventful year-end for Bitcoin, it should be noted that significant hurdles are ahead. Historical data shows that Bitcoin has sold off at $ 12,000 at least three times this year as miners and whales take profits. With the price approaching $ 12,000 again, there’s the risk of this happening for the fourth time.

There is also a looming specter of regulatory crackdowns against the Defi realm. Although a mass ban on DeFi would be difficult to enforce, centralized domains could be seized and project staff could be arrested.

Such a scenario could have a serious impact on Bitcoin’s current bullish sentiment, but for now, traders are expecting DeFi’s rebound. Such an event is likely to provide the fuel Bitcoin needs to push past $ 12,000 and reach new highs in 2020.

Why does the legal action against BitMEX and hacking KuCoin have no effect on Bitcoin price?

Everyone knows the BitMEX situation after CTO Samuel Reed was arrested on October 1. The implications of this are enormous, however, the traders’ perspectives give us a different perspective.

OI on BitMEX decreased before the exchange was ‘touched’ by authorities. However, for now, the OI has decreased enough for its competitors to take its place. As of today, ByBit has surpassed BitMEX in OI.

Source: ByBt

Now, BitMEX has slipped to 3rd place with Binance still holding the top spot.

Perhaps, the BitMEX wallet has been hit the hardest due to the aforementioned problem. The wallet balance has decreased from about 200 thousand BTC to 100 thousand BTC.

Source: CoinMetrics

This drop comes even though BitMEX broke the “traditional once-a-day process of withdrawals” and did 6 times in 2 days to reassure traders that the funds were ‘SAFU’.

If the above two points did not trigger a exodus of traders, then perhaps, it could. One of the top traders on BitMEX “Mercury-Wood-Sprite” may have left the platform. This trader last updated on October 2, one day after the BitMEX CTO was arrested.

Source: ByBt

Will the BitMEX case combined with the KuCoin hack affect Bitcoin price?

While BitMEX has faced massive US legal action, KuCoin has suffered a substantial hack, all within a period of a few days – but why these events have not affected Bitcoin price in a more negative way?

Aleks Svetski, CEO of Bitcoin investment app Amber, said it involves a number of factors, including large players buying Bitcoin.

“The price of Bitcoin is a function of global demand for a tight supply, does not change and decreases according to schedule,” said Aleks Svetski, referring to halving the money supply of the asset and mining .

“As more people, especially large-scale institutions seek to buy back some coins, it not only creates the floor price, but also continues to increase the upward pressure, and ultimately, new players. These are all holding Bitcoin outside of exchanges, and therefore it is not available for sale on the market. ”

Over the course of 2020, several major players publicly announced massive Bitcoin purchases, including MicroStrategy, Paul Tudor Jones, Square and most recently Stone Ridge.

Contrary to the bullish price action, exchange KuCoin has been hit by a hack totaling more than $ 100 million. A few days later, the authorities of the US government took legal action against the BitMEX exchange, arresting one of its leaders.

However, neither of these events has caused Bitcoin to fall into a downtrend. Bitcoin did not drop significantly according to KuCoin news and only dropped a few hundred dollars when BitMEX news came out – a relatively small response to an important news event. Conversely, after the price action has been sideways for a number of days, the asset starts its journey up from the consolidation level.

“This is setting up for an unusual race and hacking the exchange, delaying stimulus or state policy won’t be able to hold it back.”

Five major exchanges hold 10% of Bitcoin’s entire supply

More than 1.96 million BTC, or about 10.6 percent of Bitcoin’s circulating supply is held on five major centralized exchanges, Coinbase, Huobi, Binance, OKEx, and Kraken, according to data published by .

Likely due to its custody services, Coinbase holds the most to date, with 944,904 BTC currently spread across approximately 4.39 million different wallet addresses.

Huobi is second with 323,665 BTC held in around 901,600 unique wallets, followed by Binance with 289,961 BTC on nearly 2.7 million addresses. OKEx has 276,184 BTC in 339,000 wallets, while Kraken holds 126,510 Bitcoins out of 672,000 addresses.

The next seven exchanges – Bitflyer, BIttrex, Bitfinex, Poloniex, Coincheck, and Bitstamp – hold an additional 210,000 Bitcoins.

The data shows that many users still prefer to take the security risks associated with holding a significant portion of their coins on centralized exchanges despite the underlying decentralized nature of cryptocurrencies and the mantra “not your key, not your Bitcoin”.

The proportion of Bitcoin held by five centralized exchanges could actually go as high as more than 10%, with Chainalysis recently estimating that 3.7 million BTC has not moved in over 5 years potentially lost. . If that is true, then nearly 15% of Bitcoin’s supply is currently managed on five centralized platforms.

Bitcoin is about to print a key buy signal that was last seen in July despite a weak short-term outlook

Bitcoin has seen a strong rally over the past few days following weeks of consolidation. The top cryptocurrency has risen around $ 1,000 from last week’s lows near $ 10,400.

This recovery has allowed the technical case to continue to rise. One analyst recently noted that Bitcoin is about to form an important buy signal last seen in late July, amid a sharp uptrend that has taken the asset to $ 12,500. If history repeats itself, Bitcoin will continue to appreciate in the coming days and weeks.

Ichimoku clouds flashing a rising signal

Analyst “Josh Olszewicz” recently shared a chart that shows Bitcoin’s one-day Ichimoku Cloud is about to form a TK Cross, when the blue line crosses above the red line. The Ichimoku Cloud is a popular technical indicator that shows key technical levels and overall market trends.

The last time this bullish signal was seen for Bitcoin was at the end of July, amid a vertical rise from $ 9,000 to $ 11,000. BTC continues to rise after this signal forms, suggesting that the cryptocurrency will do so now.

Signals can take several days to confirm, depending on how price action played out in the coming days for Bitcoin.

Bitcoin’s short-term outlook looks weak

While Bitcoin is facing an important buy signal, the short-term outlook is weak.

Trader “CryptoHamster” explains that there are quite a few trends that show a market slump in Bitcoin price will take place in the coming days.

The chart shows that Bitcoin has formed a recent “Sell 9” candle according to TD Sequential, indicating an imminent bearish reversal. He added that Bitcoin has formed major bearish divergences on its 4-hour chart. Divergence has formed between Bitcoin price with RSI and MACD over 4 hours.

Disclaimer: This is not investment advice. Investors should learn carefully before making a decision. We are not responsible for your investment decisions.

JPMorgan Chase Bank noted that Bitcoin may face selling pressure ahead

Many JPMorgan Chase experts have analyzed the current price of Bitcoin when compared to other commodities and noted that the asset may experience selling pressure ahead.

“JPMorgan strategists say they have calculated intrinsic value by treating Bitcoin as a commodity and looking at marginal production costs effectively,” reported India’s BloombergQuint, adding that :

“Bitcoin faces a breeze in the short term based on futures market analysis and estimation of the intrinsic value of cryptocurrencies, according to JPMorgan Chase & Co.”

Bitcoin fell more than 8% last month but held above $ 10,000 and has since risen back to $ 11,000. While the cryptocurrency has had a volatile year, the Bloomberg Galaxy Crypto Index has risen more than 80%, making it one of the best performing asset classes this year.

Bitcoin futures prices usually trade slightly higher or lower than the spot price. Futures prices tend to get closer to the spot price as the contracts are closer to expiration date. Futures prices above the spot price may indicate an uptrend, while prices below the spot price may indicate bearish expectations.

JPMorgan experts have reported that Bitcoin’s bullish positions are more than its bearish positions, according to a futures-based indicator. Strategists also mentioned an increase in buying pressure stemming from the recent trend of financial giants like Paul Tudor Jones, MicroStrategy and Square.

Bitcoin has become famous as a commodity in recent years, with participants often comparing their assets to digital gold. The fact that traditional analysts have begun to see Bitcoin as a commodity may indicate the continuation of the asset’s mainstream trajectory.

Traders are cautious with Bitcoin price as rally to $ 11.7k worsens

After Bitcoin reached $ 11,720 on Binance, traders began to be a bit skeptical of the dominant cryptocurrency. Although initially breaking out above two key resistance levels of $ 11,300 and $ 11,500, BTC has recorded a number of rejections. It may be early to predict a market-wide correction, but the level of uncertainty appears to be rising.

In the short term, traders identify the range of $ 11,200 to $ 11,325 as a critical support zone. If that area holds, technical analysts believe a significant price drop is unlikely. But if Bitcoin weakens below $ 11,300, the market could become vulnerable. While BTC’s technical momentum is down, traders see a larger range of support from $ 10,600 to $ 10,900.

Considering a series of positive events that have driven Bitcoin’s price in recent weeks, the short-term pullback could be good. On October 8, Square announced its purchase of $ 50 million in BTC, reportedly 1% of the company’s assets. Then, on October 13, it was reported that Stone Ridge – a $ 10 billion wealth management firm invested $ 115 million in Bitcoin. Hence, market sentiment is very optimistic and a sell-off to neutralize market sentiment could be positive.

Traders expect a period of consolidation

Traders and technical analysts are currently cautious in the short term, but not falling down enough to predict a clear high. Bitcoin, while hovering under $ 11,500, is up 5% from $ 10,800 so far. Calculated from the monthly peak, BTC has recorded an increase of 8%, relatively high in the short term. Hence, while Bitcoin’s uptrend is down over the past 36 hours, it is difficult to predict a massive pullback.

Trader Michael van de Poppe at the Amsterdam Stock Exchange sees a healthy trend unfolding in the broader cryptocurrency market. He identified BTC could drop to the $ 10,600 to $ 10,900 support range, but the total market cap of the cryptocurrency is clearly pointing up in the direction of the expanding bullish momentum, he added:

Very healthy consolidation is going on here. A higher high is created after a higher low appears. Just another range trading period before a breakout above $ 400 billion. The next target areas are $ 500 and then $ 600. But the uptrend is very healthy ”.

Bitcoin technical analyst Edward Morra cites 3 reasons for a pullback to $ 11,100, noting BTC reaches a critical “daily supply” when it rises to $ 11,700. This means there is considerable liquidity and is also a heavy resistance. Morra also says Fibonacci 0.705 resistance and “weekly pivot point R1” are likely to drop to $ 11,100 in the near term.

“Reach daily supply point + Fib resistance 0.705 + weekly pivot point R1, expect a pullback to ~ $ 11.1k”.

Trader “Bitcoin Jack” who correctly predicted a $ 3,600 bottom in March 2020 believes that while the current trend is not bearish, it is not the best condition to continue. BTC has rejected the $ 11,500 to $ 11,700 range and is trading approximately $ 11,400. He said he could add his positions because the price is more likely to go up.

“Decreased a number but increased again – not too convincing after 2 refusals on the above two price lines. Will be one more time because there is a possibility to continue.

Although traders seem to foresee a small price drop in the short term, many analysts are refraining from their predictions of a full-scale price decline. The cautious stance of most traders could be the result of two factors that have been repeatedly emphasized by analysts since September: a massive 15.5% rally in BTC in just 19 days and resistance. as small as over $ 13,000.

Resistance level is above $ 13,000

Technically, there is no stiff resistance between $ 13,000 and $ 16,500. Since Bitcoin rose in price in December 2017 so fast and strong, it doesn’t leave many levels that could act as a resistance. Hence, if BTC breaks past $ 13,000 and consolidates above, it will increase the probability of a retest (retest) by $ 16,500 and possibly reach a record high of $ 20,000. Whether that will happen in the medium term towards the end of 2021 is still unclear.

Trader Byzantine General says $ 12,000 is a key level. A rapid rise in the price above the $ 12,000 to $ 13,000 range could help BTC reach $ 16,500 and ultimately an all-time high. The analyst said:

Volume profile based on on-chain analysis. $ 12K is an important level. That is the only resistance left. Then the small speed increase at $ 16.5K ”.

The company’s CEO Cathie Wood, which manages more than $ 11 billion of Ark Invest assets, also identified $ 13,000 as the most important technical level for Bitcoin. As previously reported, Wood says that “technically” there is very little resistance between $ 13,000 and $ 20,000. It is not yet clear whether BTC can regain its bullish momentum above $ 13,000 in the short term, leaving traders cautious in the short term but not plummeting prices.

Variables to maintain momentum

Various on-chain indicators and fundamental indices, such as HODLer growth, hash rate, and reserves on Bitcoin exchanges indicate a strong uptrend. On top of that, according to data from Santiment, the developer activity of the Bitcoin blockchain protocol has steadily increased:

“The developer team’s BTC deposit rate on Github soared to an all-time high in October. This is a great sign that Bitcoin’s team continues to strive towards higher performance in the future.”

It is likely that favorable macro factors and bullish fundamentals make up for any short-term technical weaknesses. For alternative assets and stores of value like Bitcoin and gold, negative inflation and interest rates are considered sustainable catalysts. The US Federal Reserve has emphasized a stance on maintaining low interest rates for many years to come to offset the impact of the pandemic on the economy. Recent reports indicate that other central banks may follow suit, including the Bank of England, when Deputy Governor Sam Woods issued a letter asking for public consultation that read:

“We are asking for specific information about your company’s current readiness to deal with zero bank rates, negative bank rates or tiered reserve wage systems and steps. you need to do it to get ready for this. ”

In the medium term, positive on-chain data points and volatile interest rates could further fuel Bitcoin, gold and other safe-haven assets. That could coincide with Bitcoin’s post-halving cycle as it enters 2021, which once sent BTC to new record highs. This time, the market is driven by the entry of institutional investors, as evidenced by the large number of platforms suitable for the institution.

The data shows that Bitcoin transaction volume is not affected by USDT’s market dominance

Tether’s stablecoin USDT dominates the trading volume of the crypto market but data shows that its $ 15.7 billion capitalization has no effect on Bitcoin’s volume.

Tether’s stablecoin has been the leading underlying trading pair for cryptocurrencies for over eighteen months.

This is quite an impressive achievement given the ongoing trial with the Attorney General of New York and other frequent rumors that USDT is not fully backed by USD or within the reach of regulators.

USDT is also the dominant stablecoin in China even though the country banned cryptocurrency exchanges in 2017. This is because major exchanges like Binance, Huobi and OKEx have turned to stablecoins as muscle pairs. their top department.

It is also worth noting that competitors such as USD Coin (USDC), TrueUSD (TUSD) and Paxos Standard (PAX) have a total capitalization of $ 520 million in June 2019. Over the same period, USDT has accumulated. cumulative market cap is greater than $ 3.1 billion.

Over the past 15 months, USDT’s market cap has risen to $ 15.7 billion, while its four biggest competitors have only reached $ 4.1 billion. Despite all the dollar-backed controversy, USDT has almost 80% market share of all fiat-backed stablecoins.

A similar story is recorded in trading volume, where Tether dominated the lead with a rate of 75%.

Volume of Cryptocurrencies Consolidated by Base Pair | Source: CryptoCompare

Data from CryptoCompare shows that USDT holds almost 73% market share of trading volume over the past three months. Before doing any further research, it should be noted that the numbers will vary by data provider, as some exchanges are often excluded due to lack of transparency.

Despite these deviations, CryptoCompare Head of Research, Constantine Tsavliris, explained that:

“Regarding trading BTC / USDT or other equivalent stablecoins like USDC or PAX, we haven’t seen a significant change in volume yet.”

An on-ramp stablecoin has nothing to do with Bitcoin price

Most traders are used to using Bitcoin as the primary gateway for cryptocurrencies. This solution may be the only one, or at least it has the highest liquidity for most traders in 2017 or 2018, but as the stablecoin market grows, the volume of altcoins paired with USDT skyrockets. .

The wider offering of altcoin pairs entailed higher volumes of stablecoins, and when Coinbase, Huobi, and Binance launched their own stablecoins, the trend rose sharply.

It would be a mistake to infer that Bitcoin’s increasingly diminished use as a primary vehicle for cryptocurrencies would be detrimental to its price. Bitcoin buyers may have increased volume, but used the same amount to sell it later in exchange for altcoins.

Furthermore, even if one uses stablecoins as the leading solution, part of this flow will eventually flow to Bitcoin. Furthermore, most crypto assets are not direct competitors to Bitcoin’s value propositions and scarcity.

LINK in / out flows over the past 24 hours | Source:

For example, the chart above shows a cash flow of $ 26.6 million from LINK to Bitcoin over the past 24 hours. A similar trend happened with the rest of the altcoins, confirming that Bitcoin did not lose volume as the stablecoin established itself as the dominant base pair.

By analyzing the aggregate cryptocurrency market volume, one can determine whether the stablecoin is increasing its overall market share or simply taking it away from Bitcoin.

7-day average volume (billion dollars) | Source: TradingView

The chart above is probably staggering even for traders who experienced the late 2017 bubble. January 2018 average daily peak of $ 36.6 billion could be overkill at the time. But it’s rather tiny compared to the current $ 100 billion level.

Regardless of whether the spurious mass influences this observation, we can see that, proportionally, there has been a significant increase. This volume growth coincided with stablecoins issued from $ 3.6 billion in June 2019 to current $ 18.9 billion.

Volume dominance is the main factor

Michael Saylor, co-founder and CEO of MicroStrategy believes Bitcoin’s primary use for reserve currency. Therefore, it does not compete with tokens like ETH and stablecoins.

Unlike traditional Bitcoin dominance data based on market cap, Saylor’s analysis includes only proof of work (POW) coins.

Even comparing Bitcoin’s volume to a broader asset base, it matches a total of the top 20 altcoins for a transparent volume analysis.

30-day cumulative transparent trading volume (USD) | Source: Nomics

Keeping in mind the above data, it can be safe to say that stablecoins are not a rival to Bitcoin in terms of volume or market cap.

Tsavliris explains that:

“For the top altcoins over the past few months, volume has not necessarily moved away from the Bitcoin market. Instead, they are offered and used in tandem with the USDT marketplace. USDT markets are attractive because they often offer liquidity that outperforms the Bitcoin market on exchanges most.