Bitcoin’s Rally: Stronger Purchasing Power Fuels Growth
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A recent report from on-chain analytics firm Glassnode reveals a key factor behind Bitcoin's latest price rally: increased investor purchasing power. The analysis centers around the Bitcoin Stablecoin Supply Ratio (SSR) and its associated oscillator. The SSR measures the ratio between Bitcoin's supply and the supply of stablecoins pegged to the US dollar, essentially indicating the amount of readily available capital for Bitcoin purchases. A high SSR suggests weak purchasing power, while a low SSR points to strong purchasing power. Glassnode's modified indicator, the SSR Oscillator, tracks the 200-day moving average of the SSR within Bollinger Bands. The current reading shows the oscillator near zero, indicating neutral purchasing power compared to the previous bull run. This contrasts sharply with the situation during the late 2023 rally beyond $100,000, where the oscillator registered highly positive values, suggesting low stablecoin supply relative to Bitcoin. Despite Bitcoin's current price being similar to its peak last year, the improved SSR indicates significantly stronger underlying demand. This suggests that investors currently possess greater purchasing power to acquire Bitcoin, contributing to the recent price increase. Stablecoins, as explained by Glassnode, are crucial to the crypto ecosystem, acting as the primary quote asset for trading and representing readily available capital. The difference in the SSR indicator between the current rally and the previous one highlights the improved market conditions and investor confidence. This analysis provides valuable insights into the dynamics of Bitcoin's price movements, emphasizing the role of investor purchasing power and the significance of on-chain metrics in understanding market trends. The current price of Bitcoin is approximately $109,500, reflecting a 2% increase over the past week.
(Source: https://www.newsbtc.com/bitcoin-news/bitcoin-rally-backed-stronger-purchasing-power/)
