Bitcoin: Stablecoin Supply Ratio Oscillator

Benjamin Cowen

Introduction to Stable Coin Supply Ratio Oscillator (SSRO)

The SSRO is an interesting metric that measures the potential of the stable coin market to move the price of Bitcoin. It is calculated by dividing Bitcoin's market cap by the stable coin market cap.

How SSRO Works

  • A high SSRO indicates low potential for the stable coin market to move the price of Bitcoin higher.
  • A low SSRO indicates high potential for the stable coin market to move the price of Bitcoin.
  • The SSRO can be used as a tool for confluence with other indicators.

Historical Data

  • The SSRO has spiked up to 3 or 4 several times in the past, including in 2019, 2021, and 2023.
  • After spiking, the market has continued to go higher for a while before coming back down.
  • The current cycle has seen double tops in the SSRO, where the first spike is followed by a lull and then a second spike.

Current State

  • The current SSRO is at 1.23, which is higher than the level it was at during the previous spike in 2023.
  • The SSRO needs to go down to around 0.53 to indicate a high potential for the stable coin market to move the price of Bitcoin.

Conclusion

The SSRO is a useful tool for analyzing the potential of the stable coin market to move the price of Bitcoin. It should be used in conjunction with other indicators to form a complete view of the market.