Bitcoin price uptick has led to a spike of Bitcoin futures trading on both the CME and Bakkt
The increase in the price of Bitcoin has led to a rise in the Bitcoin Futures trading, both on the CME as well as Bakkt. The crypto trading was in the past few weeks on a broad front on the decline, as most of them give the macro-economic indicators, more attention. Bitcoin price recent upswing has many, however, surprised – and the futures markets experienced higher trading volumes than expected.
CME and Bakkt experience trading volume-peak
Both Bakkt, as well as CME, reported a sharp increase in the trading volume for Bitcoin futures markets – the most significant increase in volume since March 16. As skew reported recently, the strong showing may be indicating a return of investor interest in Bitcoin after a temporary lull.
CME & Bakkt both with strong showings yesterday, largest volume since Mar 16th. pic.twitter.com/flQLsAqQNM
— skew (@skewdotcom) April 3, 2020
The growth in the volume of capital transactions is not good news for the market, then, the majority of traders on these exchanges can bet that the Bitcoin price will fall. However, at the press time, longs are double all shorts across all the major exchanges. And now, Bitcoin price is just under the $ 7,000 resistance price point.
Macro-economic indicators
While it is easy to get caught up in the internal market movements of the cryptocurrency market, we must not forget that macroeconomic indicators still prevail. This is because we are still in the middle of an economic crisis.
The uncertainty has made predictions about Bitcoin’s future price fluctuations wildly. For example, an analyst from Morgan Creek Digital believes that Bitcoin will halve and reach an ATH in September. Others, however, dropped more and pointed to worsening macroeconomic indicators. In the past week, some Americans 6.6 million have applied for unemployment benefits.
Assuming we are in a recession, it’s hard to predict Bitcoin price movements, it’s because the leading cryptocurrency has never experienced it once, despite being born out of the Great Depression. However, the increase in trading volume is a positive indicator that will give traders some hope in this price increase process.
Stablecoin Supply Ratio (SSR) is near its ATL.
Low SSR means the current stablecoin supply has strong buying power to purchase $BTC and push the price up.$USDT (ERC20) exchange balances at an ATH indicates that those coins are waiting on the sidelines.https://t.co/r1Re9UoVNv pic.twitter.com/I5ZFnScnLX
— glassnode (@glassnode) April 1, 2020
Stablecoin supply ratios indicate big Bitcoin price buying power
According to Glassnode, the current Stablecoin Supply Ratio (SSR) has reached an all-time low. In contrast, USDT balances on exchanges are at an all-time high, which could create a perfect storm for a series of Bitcoin purchases.
Glassnode outlines the Stablecoin Supply Ratio as a metric that identifies the supply of stablecoins ready to buy Bitcoin, and thus drives the price of the main cryptocurrency up.
For example, if the Bitcoin market is considered a ‘closed system’ with a steady supply. When Bitcoin price is low and the supply of stablecoins can buy a larger portion of the circulating Bitcoin supply, it has a high buying power.
The chart below from Glassnode not only shows Stablecoin Supply Ratio at extremely low levels, but also shows that there is a large number of stablecoins on exchanges, ready to be used to buy potential Bitcoin.
Stablecoins gain new respect, what does it mean for Bitcoin price?
In the context that the COVID-19 market is causing panic in the traditional and cryptocurrency markets, there is already a well-functioning entity. Stablecoins have a value justified because their lack of volatility caused them to rise in prominence in the cryptocurrency markets.
In fact, some stablecoins have gone even further to mint new coins at this time to add to the overall market cap of the cryptocurrency industry – a bit like the Federal Reserve’s recent money printing. Tether (USDT) has even breached the $6 billion mark of minted USDT.
Having suffered a dramatic drop in price, there would have likely been a mass evacuation out of volatile cryptocurrencies into more stable options, which in turn might have been the boost in demand that led to increased supply. However, with the markets now calming down, and seemingly poised to grow once again, a perfect storm may be brewing for a rush back to Bitcoin from stablecoins.
Bitcoin’s mining reward halving may also be a factor to consider when noting the Stablecoin Supply Ratio in comparison with the all-time high of USDT on exchanges. While the markets have been struck by this unprecedented collapse, there are still many who feel that the Bitcoin reward halving will lead to renewed positive price action for Bitcoin. In fact, some are denouncing the current economic stimulus policies and putting forward Bitcoin as a way to ‘opt-out.’
My hope after this crisis is that more people recognize central bank monetary policy for the evil that it is. It’s never neutral, it favors one group over another and causes huge societal problems.
Once they recognize that, it’s a short step to opt out with #Bitcoin
— Jimmy Song (송재준) (@jimmysong) March 31, 2020
Read more:
- Google Search Interest For The Term ‘Bitcoin’ Is Close To Its All-Time High In Seven Developing Nations
- Just Five Days Before The Bitcoin Cash Halving, Bitcoin.Com Has Allegedly Fired Half Of Its Staff