A representative of crypto data company Santiment explained how Tether’s on-chain data could potentially predict Bitcoin (BTC) bull runs.
Santiments Director of Marketing and Social Media, Brian Quinlivan told Cointelegraph on May 7 that the percentage of USDT on the exchanges often anticipates bullish runs on Bitcoin.. He explained the principles behind the analysis:
“Most USDTs are not only withdrawn from exchanges to be stored in wallets or paid out through a FIAT-based platform like Coinbase. When people don’t use USDT, they mostly put it in Bitcoin. And the best part is that it is The USDT percentage often fluctuates a few hours or days before the BTC price reacts to it, so monitoring this metric beforehand can be a tremendous benefit by detecting a sudden fluctuation early enough. “
The correlation is expected to be permanent
Quinlivan found that this correlation started a few years after the USDT started. As soon as the stable coin gained traction. Now explained that Tether is clearly used as the most stable price token. Also notes that it is confident that this correlation will continue to manifest in the future. Quinlivan noted that the one-year chart has shown a clear and unambiguous inverse correlation over the past 9 to 10 months.
Bitcoin price chart with Tether USDT on cryptocurrency exchanges. Source: Santiment
Other interesting relationships
Quinlivan too found a relationship between the amount of decentralized stablecoin (DAI) on cryptocurrency exchanges and the price of ether (ETH). He explained:
“The amount of DAI offerings on the exchanges often seems to be leading in the Ethereum price. However, this is somewhat less consistent than the BTC-USDT pair because the price of ETH is more dependent on the BTC . “
In the end The representative of the data company admitted that other metrics are also worth checking. In particular, mentioned an interest in social trends such as key words and mentions of topics in various conversations on social platforms. He said the company has seen in recent months that fear of COVID-19 is directly inversely related to BTC’s price.
Bitcoin is increasingly showing bullish signs
After a sharp decline in March Bitcoin shows more and more bullish signs. As Cointelegraph reported earlier today, institutional investors seem to expect Bitcoin to move upward as the Chicago Mercantile Exchange futures have recently broken records.
The renewed interest in the leading cryptocurrency is often attributed to the upcoming halving of Bitcoin is not evenly distributed and Cointelegraph recently analyzed which countries are most interested in the event.