💵 Stablecoins are another key aspect of demand that I continue to monitor. There is a clear relationship between market trends and the market cap of stablecoins.

When stablecoins are expanding rapidly and their market cap is growing strongly, this is often associated with a positive market phase.

It’s a way to illustrate part of the incoming liquidity entering the market.

What then becomes interesting to observe is when those stablecoins are actually deployed, and that’s exactly what the Stablecoin Supply Ratio (SSR) helps to capture.

— 💡 This ratio compares Bitcoin’s total market capitalization to the value of stablecoins. When the SSR rises sharply, it indicates that buying power is weakening relative to Bitcoin’s market cap growth, signaling a trend that may be losing momentum.

Conversely, when the SSR declines significantly, it suggests that BTC is undervalued relative to the available liquidity in the market. —

📉 Following the latest BTC correction, the SSR experienced a sharp drop, the strongest of this cycle.

This means that Bitcoin’s market cap declined much more aggressively than the market cap of stablecoins.

This points to an imbalance between liquidity ready to be deployed and Bitcoin’s current valuation.

✅ Historically, these are often the periods during which market bottoms tend to form, and this could once again be the case.

⚠️ That said, we are currently in a highly uncertain macro environment, exacerbated by geopolitical and trade tensions.

As a result, it remains crucial to keep monitoring the evolution of stablecoin market caps, which should absolutely not start declining as well.