Stablecoin Reserves Plummet to 2024 Levels, Signaling Prolonged Market Weakness

The stablecoin reserves have dropped significantly, falling back to levels last seen in 2024. According to CryptoQuant, the reserves have decreased from $50.9 billion to $41.4 billion, a decline of 18.6%. This trend is not limited to Binance, as all exchanges are experiencing reduced liquidity.

The decrease in stablecoin exchange inflows indicates greater selling pressure, with investors either selling or avoiding the market entirely. As a result, the market has faced only sell-side liquidity, further weakening it.

The Market Flow Strength Indicator on TradingView shows reduced capital inflows and increased outflows, with capital flow sitting within the negative zone of -20 at press time. The Average Relative Strength Index (AVG RSI) is also in the bearish zone, indicating low market demand and outflows dominating the market.

With liquidity remaining low, buying power is constrained, leaving the market unable to sustain another upside trend. Therefore, a prolonged period of weakness is expected until liquidity recovers.