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Daily Bitcoin On-Chain Snap #27

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Stablecoin buying power on display with $4.3bn USDT parked on exchanges as February pattern re-emerges

The Tether Percent Balance on Exchanges metric captures the percentage amount of Tether that is parked on exchanges. Tether (USDT) is a key gauge to stablecoin buying power as it accounts for over 90% of stablecoin trading volume.

According to Glassnode, roughly 6.2% of Tether’s 69bn circulating supply is parked on exchanges. This amounts to roughly $4.3bn in stablecoin buying power, a slight reduction from ~ 7% at September month-end. This is significant as a similar setup emerged in February when the percentage of USDT on exchanges spiked to 16% shortly before BTC rallied ~90%. The February rally resulted in a 3% reduction in Tether reserves from 16% to 13%, signaling Tether was spent to acquire BTC. Similarly, October saw a modest reduction in exchange Tether reserves from 8.6% on 28 Sep to 6.2% in mid-October. This remains encouraging for the current rally as the data shows there is plenty of dry-powder left to support bitcoin’s move higher.

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