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The stagnation of stablecoin supply on exchanges has emerged as a significant obstacle to the resurgence of Bitcoin and the broader cryptocurrency market, according to experts from Matrixport.
Since the beginning of the year, the supply of stablecoins has decreased by $5.6 billion, from $159 billion to $153.4 billion. Reserves of fiat-pegged digital currencies on the largest cryptocurrency exchange by trading volume, Binance, have dropped by 19% since November.
“Stablecoins are the primary channel for liquidity in digital assets, and stagnation often indicates that capital is flowing back into fiat rather than remaining in the crypto market,” the Matrixport specialists explained.
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If capital outflow from the crypto market continues at the current rate over the next month, Bitcoin risks remaining around its current price level ($68,000) for an extended period. Analysts lament that even changes in legislation in the U.S. are unlikely to quickly revitalize the market.
Growth requires an influx of funds and increased demand from investors, rather than merely political decisions. The current monetary policy of the U.S. Federal Reserve is dampening interest in high-risk assets—loans are not becoming cheaper, and the central bank is not printing new dollars. Experts from Matrixport cautiously suggested that conditions for a trend reversal might emerge by early autumn.
Previously, analysts from the CryptoQuant platform noted a decline in selling pressure on Binance: the market pressure from sellers is decreasing, which opens a window for a potential price recovery.
