Importance of USDT and USDC for Bitcoin Price Movement

After hitting a peak of $69,000 on Nov. 10, Bitcoin has dropped 15% over the past 10 days and is back below $60,000.

Bitcoin Price 4 Hour Chart | Source: Tradingview

While BTC even touched a low of $55,600 yesterday, the market is looking to recover for the time being and a specific trend from USDT could support an immediate upside. This article will analyze the current movements on the exchange to understand the role of stablecoins.

Massive USDT Inflows Help Bitcoin Recover Above $57,000

According to Santiment, the influx of stablecoins into the exchange in the past 24 hours has been huge. The data shows that over $770 million USDT was transferred to the platforms in a matter of hours – the highest inflow for this stablecoin.

USDT (purple) and USDC (red) inflows into the exchange | Source: Santiment

A similar situation happened with USDC, with more than $454 million in transfers, reaching a 4-month high. It can be deduced that these cash flows are the result of a potential acquisition. Looking at the chart, the same amount of USDT spike at the end of September also triggered the October bull run.

While this is a strong sign of market recovery indicating buying pressure, other variables need to be assessed for a more comprehensive view.

SSR acknowledges support from stablecoins

The SSR ratio is the ratio between the supply of Bitcoin and the supply of stablecoins expressed in BTC. Whenever the SSR is low, it usually indicates that traders are using stablecoins to buy more BTC.

Rate SSR | Source: Glassnode

According to the chart above, the SSR rate had a high value in the first half of 2021, but has been decreasing since then. After hitting a July low, it now shows a change in supply/demand dynamics.

To sum up, SSR is showing bullish signs with massive inflows and Bitcoin has the right background to trade higher on the charts in the near term.

Another catalyst?

MVRV rate | Source: Santiment

Through 365-day MVRV ratio analysis, Bitcoin remains in the investment zone as it has yet to reach the levels it had in Q2/2021. The long-term trend remains bullish for Bitcoin, but the charts will need to change sentiment if the price is to recover.


Volatility of asset classes | Source: Anthony Pompliano

Bitcoin volatility is about 7 times higher than that of the S&P 500. BTC up 12% equates SPY up 1.7%.

Resistance at $100,000 in 2022

Bloomberg Intelligence director of commodity strategy Mike McGlone thinks BTC will have bullish momentum next year regardless of temporary corrections. BTC is likely to face resistance at $100,000 and $50,000 will act as support.

Source: Bloomberg Intelligence

Increasing adoption and decreasing supply will be the key factors for BTC’s promising success. Despite the recent slide in prices, analysts remain upbeat.

Previously, McGlone predicted Bitcoin would trade at $100,000 in the coming years. He noted that any correction is short-term, which sets the stage for a potential Bitcoin bull run.