Two significant BTC supply indicators give conflicting signals about the possibility of a decline prior to the Bitcoin halving.

Is at 17-month highs in anticipation of the adoption of a spot Bitcoin exchange-traded fund (ETF) in the upcoming months, and there are only 164 days left before the next Bitcoin halving event.

Nevertheless, even though the stablecoin supply rate oscillator (SSRO) indicates the start of a new bull cycle, it has raised a serious alarm despite Bitcoin's 106.38% year-to-date gains.

Before the Bitcoin ETF, stablecoin's purchasing power declines.

According to Glassnode data, this stablecoin supply ratio metric—which serves as a crucial gauge of stablecoin supremacy over Bitcoin—soared to a new all-time high of 4.13 on October 25. An enormous thirst for Bitcoin accumulation on-chain is suggested by such a spike.

However, this also suggests that the buying power of stablecoins is at an all-time low.

With its peak of 4.12 on June 26, 2019, exactly 320 days before to the May 2020 halving, this is the highest SSRO divergence ever observed in history.

Thus, the emergence of this same peak signal on the SSRO this week could indicate the start of a retracement period ahead of the second halving event in April 2024.

Though a local top akin to the one in 2019 is surely likely, and there is currently little relative purchasing power, the bigger picture shows that high SSRO levels have historically corresponded with the start of lengthier bull market cycles. 

Reserve risk" suggests that the surge in Bitcoin may not be like any other.

One statistic is painting a clear picture of market mood, suggesting that the current Bitcoin rise may be different from that of 2019. The prospect of a spot Bitcoin ETF approval tempting markets and potentially altering the price of BTC.

In particular, the reserve risk (RR) indicator, which measures the risk-reward incentives related to the present "HODL bank" and the spot price of Bitcoin. In the words of Glassnode:

Investing presents a seductive risk/reward when one is confident

The accompanying graphic illustrates how, in June 2019, the RR accelerated to levels above the green band, which corresponded to the SSRO's peak acceleration.

Even with the current record-high SSRO measurement, the RR is still close to multiyear lows at the bottom of the green band. 

In the past, buying Bitcoin at such low rates of return—that is, a significant discount to the current price of BTC—has produced substantial returns.

It also implies that there is still a lot of hope for bitcoin's future performance, despite the fact that its price is at a 17-month high.

Because these corporations currently own the largest share of the whole supply, long-term holders may be well-positioned to realise substantial returns.

DISCLAIMER: We don't provide any investment advice.