STRONG CORRELATION BETWEEN THE SUPPLY OF TETHER (USDT) AND THE PRICE OF BITCOIN
SimonaD's comparison with CryptoQuant data shows a close correlation between USDT supply and Bitcoin price throughout 2023. Currently, Tether's capitalization has reached more than 96 billion USD, a continuous increase of nearly 5 billion USD since the first day of 2024.
Times when USDT supply “jumps” often serve as an early signal to predict Bitcoin's subsequent increase. This upward momentum may come months or weeks after this signal. But when Bitcoin price decreased, USDT supply only moved sideways and did not decrease significantly over the past year.
Recently, Bitcoin price began to fluctuate strongly with a larger amplitude than before, increasing and decreasing by several thousand USD. But the total supply of USDT still ensures stability and does not decline. This proves that there is potential buying power from a diverse group of investors in general, and that wavering sentiment has not yet appeared because of the recent market decline.
Notice the green area, which is the Bitcoin trading volume. This volume has also increased in tandem with the price and total supply of USDT, indicating that more printed USDT is being put into circulation and driving Bitcoin price.
