Has Bitcoin’s Selling Pressure Exhausted? This metric may imply that

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On-chain data for stablecoin buybacks during the recent price crash might suggest that there aren’t many Bitcoin holders selling anymore.

Stablecoin’s exchange count has remained low recently

As one analyst pointed out in a CryptoQuant article, large stablecoin buybacks have typically accompanied large declines in the price of Bitcoin during this bear market. A stablecoin is said to be “redeemed” when an investor exchanges the token for fiat through the issuer of said coin.

Investors typically use stablecoins when they want to escape the volatility associated with tokens like Bitcoin. Thus, their redemption may be a sign that investors are currently exiting the market. The “supply of repurchased stablecoins” is an indicator that measures the total amount of these repurchases in the market of all types of stables.

Another metric that tracks these withdrawals is the “number of stablecoin redemption events”, which, as the name already suggests, measures the total number of redemptions taking place in the market rather than the sum total of their value. .

Now, here is a graph that shows the trend of these two indicators of stablecoin redemptions over the past year:

It seems that only one of these measures has seen its value increase in recent days | Source: CryptoQuant

As the chart above shows, during the steep declines in the price of Bitcoin in this bear market so far, the supply of redeemed stablecoins has generally recorded high values. This trend makes sense as investors would convert to stables to sell them during the crash and then buy them back for fiat.

The number of stablecoin redemptions has also seen spikes during such dumping events, except for the most recent one. This implies that during the pre-last price crash, many investors still participated in stablecoin buybacks, which shows that the market had an even and more natural appetite to sell.

During the most recent decline where Bitcoin fell from over $18,000 to below $17,000, however, the number of buybacks remained low while the buyback offer still saw very high values. This means that only a few whales were involved in this dumping event, a possible sign that large-scale selling pressure could be wearing off in the market.

BTC price

As of this writing, the price of Bitcoin is hovering around $16,800, up 1% in the past seven days. Over the past month, the crypto has gained 2% in value.

The price of the coin does not seem to have shown any significant deviations in recent days | Source: BTCUSD on TradingView

Featured Image by Dmitry Demidko from Unsplash.com, Charts from TradingView.com, CryptoQuant.com

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