Predictive Strength
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Predictive Strength
Measures the total volume of stablecoins transferred across blockchains.
Stablecoin inflows to exchanges often precede altcoin rallies, as traders use them to purchase volatile assets. For example, a 53% YoY increase in active stablecoin addresses (to 30M) and $4.1T monthly transfers in 2025 correlated with Bitcoin's climb from $60K to $90K+ in late 2024. Large transfers (>$1M) spiked before major market moves, suggesting institutional positioning.
Stablecoin supply mobility (51% held <1 month in 2024) mirrors risk appetite. Rising supply correlates with bullish cycles, as seen in 2025's $225B supply (63% YoY growth) preceding Q1 altcoin rallies. Conversely, supply stagnation during regulatory pressures (e.g., MiCA) preceded consolidation phases.
Stablecoin transfer volume data is sourced from public blockchain transactions, categorizibg activity using labeled addresses and heuristic filters to distinguish organic transactions from bot-driven or internal smart contract activity. It exclude high-frequency trading, intra-exchange rebalancing, and automated bot transactions, focusing on user-initiated transfers to exchanges, DeFi protocols, or external wallets.
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To understand a predictive factors predictive power, we create a simple long/short strategy and simulate its past performance (with daily rebalancing):
The strategy is rebalanced daily, on a continuous basis. There are 0.5% transaction costs applied on each position adjustment.
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