Crypto market faces liquidity squeeze as stablecoin reserves dwindle

The cryptocurrency market has experienced a decline in stablecoin exchange reserves, leading to reduced market liquidity.

Data from CryptoQuant shows that USDT reserves have fallen by $9 billion in two months, from $60 billion to $51.1 billion. This decrease in stablecoin balances typically signifies a drop in investor confidence and can lead to further selling pressure on major assets.

Despite this trend, some analysts believe that the recent decline is an orderly deleveraging process, while others warn of deeper losses if support levels are breached.