Lesson 3
Stablecoin (STABLECOIN_MCAP)s & On-Chain Liquidity
Track stablecoin supply (Glassnode, CryptoQuant) as a crypto-native liquidity indicator. Rising supply with BTC (BTCUSD) in uptrend = bullish. Falling supply with BTC (BTCUSD) in downtrend = bearish confirmation.
📊 Indicators mentioned in this lesson (click for details):
Stablecoin (STABLECOIN_MCAP)s are crypto's version of money supply. Tracking them reveals on-chain liquidity conditions.
What Stablecoin (STABLECOIN_MCAP)s Measure:
- USDT (Tether): Largest, ~$100B+
- USDC (Circle): US-regulated, ~$30B+
- Others: DAI, BUSD, etc.
Total stablecoin supply = 'dry powder' in crypto. When it grows, there's more buying power. When it shrinks, there's less.
The Signals:
Stablecoin (STABLECOIN_MCAP) Supply Rising:
- New capital entering crypto
- Fiat being converted to stablecoins
- Bullish for crypto assets
Stablecoin (STABLECOIN_MCAP) Supply Falling:
- Capital exiting crypto
- Redemptions > new mints
- Bearish for crypto assets
Exchange Balances:
- Stablecoin (STABLECOIN_MCAP)s on exchanges: Ready to buy
- Stablecoin (STABLECOIN_MCAP)s leaving exchanges: Less buying pressure
- BTC (BTCUSD) leaving exchanges: Supply squeeze potential
- BTC (BTCUSD) entering exchanges: Selling pressure
The Velocity Factor:
Stablecoin (STABLECOIN_MCAP) velocity (how fast they move) matters too. High supply + low velocity = sideline cash. High supply + high velocity = active trading.
Check your understanding
Lesson Quiz
Quiz Check
What does 'exchange reserves (EXCHANGE_RESERVES) declining' signal for Bitcoin (BTCUSD)?
Quiz Check
Stablecoin (STABLECOIN_MCAP) market cap is growing while BTC (BTCUSD) is flat. What might this signal?