Bitcoin analyst says new ATH in October is likely as on-chain data shows stablecoins may have started to pump into BTC.
Stablecoins Reserve Starts Moving Down, Bitcoin To Reach New ATH In October?
As explained by an analyst on CryptoQuant, after staying at highs, the stablecoins reserve has finally started a decline. Based on this and a couple other indicators, the quant believes there is a high probability we will see a new Bitcoin all time high (ATH) in October.
The stablecoins exchange reserve is an indicator that shows the total amount of fiat-tied coins currently present on exchanges.
An increase in the value of the metric could suggest an increase in the supply of dry powder for Bitcoin and other cryptocurrencies.
When the reserve starts declining, it may mean investors now want to enter into volatile markets and are exchanging these coins to do so. Large withdrawals to personal wallets or to fiat will also show up as a decrease in the indicator.
The below chart shows how the value of the stablecoins exchange reserve has changed recently:
The reserve indicator vs the Bitcoin price | Source: CryptoQuant
As the graph shows, the value of the stablecoins reserve made new peaks just recently. This shows how these fiat-tied coins were piling up on exchanges as investors were waiting to enter volatile markets.
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At the moment, it looks like the indicator has started turning downwards. Lately, the trend with the metric has been that when such a decline happens, the price of BTC moves up as these coins pump into the cryptocurrency.
Also, the chart has two other indicators as well, the Bitcoin Relative Strength Index (RSI) and the stochastic RSI. The RSI uses the magnitude of recent price changes to evaluate whether the coin has been oversold or overbought.
Low values of the indicator suggest BTC is currently oversold, while higher ones may suggest it has been overbought.
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The analyst points out the regions where the RSI dipped down to quite low values, signifying bottoms. Based on this and the stablecoins reserve, the quant thinks that since Bitcoin has hit a bottom now, it should move up next, and so a new ATH could be there in October.
At the time of writing, Bitcoin’s price floats around $47.6k, up 5% in the last 7 days. Over the past month, the crypto’s value has increased by 4%.
Here is a chart showing the trend in the price of the coin over the last five days:
BTC's price moves sideways after a strong march up | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com