Bitcoin’s price has been on the rise again in recent days, but there are a few things that seem worth noting.
According to analyst Arab Chain from CryptoQuant, this surge does not appear to be entirely driven by an influx of new liquidity. A core metric under focus is the Stablecoin Supply Ratio (SSR), measuring Bitcoin’s market cap relative to total stablecoin value.
Bitcoin liquidity strain emerges as SSR rises faster than price
When the SSR increases, it means the supply of stablecoins is not growing as fast as the Bitcoin price is rising. In short, buyers have less strength to push BTC higher. This metric is commonly used to gauge buyer strength, as stablecoins often serve as the primary bridge between fiat and cryptocurrencies in trading.
The rise in the SSR amid the BTC rally indicates that new buyers, especially those bringing capital in stablecoins, have not yet entered the market in large numbers.
The intense market activity is evident in derivatives data on CoinGlass. Bitcoin trading volume rose 53.66% to $57.81 billion, a significant surge.
Not stopping there, options volume skyrocketed by 60.41% to $5.13 billion, indicating that many speculators were starting to take positions in the derivatives market. Open interest also increased by 1.70% to $85.79 billion.
However, upon closer examination, a gap is beginning to emerge. If liquidity from stablecoins doesn’t follow the price surge, momentum may quickly fade. At this point, many traders who had already entered the market begin to realize profits. If stablecoin flows do not increase soon, buying power could diminish, increasing the potential for a correction.
Furthermore, Arab Chain warns that current conditions reflect still-partial liquidity support. To maintain the uptrend, the market needs a substantial influx of new stablecoins in the next few days. Otherwise, the rally could lose momentum more quickly than expected.
Investors are also advised to look not only at the price but also at the direction of the underlying cash flows. A surge without additional fuel could bring a vehicle to a standstill.