PB Banter 5-25-2021
"Pump the USDC"
All charts are from or will soon be coming to checkonchain.com
ANALYSIS:
Bitcoin bulls work weekends, did ya know? After the mother of all price nukes, price chopped around the key $34k-$37k level all weekend. Fortunately, bulls held their ground (for now at least) and kept us closer to the 1 and 2 year highs. Close below puts us closer to the lows over those timeframes and for me would be an insanely bearish signal.
Today let’s focus on stablecoins - USDC in particular:
I want to preface this by saying that I understand not all stables go directly into buying Bitcoin, or even Ethereum. However - at a high level I equate more stablecoins circulating to more gambling chips entering a casino (the crypto casino), and viceversa for redemptions.
With that said - biggest USDC print ever occurred at the lows ($1.1 Billion), and the printing isn’t slowing down by the looks of it. Seems like Americans are more interested in gambling when the minimum bet size (prices) goes down. Something to keep bookmarked from the chart above is that late March to early April was an odd period of USDC redemptions. Note that this was the “hype period” leading into the Coinbase direct listing.
Now let’s look at USDC prints on an adjusted basis:
The daily % change in USDC market cap is telling us that the $1.1 Billion print was historically significant (6.2% increase in market cap). Only a handful of 6%+ increases on this chart, all of which preceded a bounce / bottom in some capacity.
Only other thing worth paying attention to is the bearish divergence between USDC prints and price from the beginning of January until now: adjusted print size was decreasing while price was increasing. Possible signal of loss in appetite for crypto at those elevated levels.
Final chart: USDC Dominance within the stablecoin market.
Takeaways for this chart:
Increase in USDC Dominance has historically preceded price run ups
Current USDC Dominance = 21.5%
USDC Dominance went sideways when we were at the highs
USDC Dominance broke to new highs in a big way on this price dump
I could be totally wrong, but the way this is going, I’ll say that I think we’re still early-ish in this bull while USDC Dominance is below 50%. Break below $34k and throw that theory out the window of course.
That’s it. Now go be the bid you want to see in the world.
Stay bullish,