Stablecoin Reserves Plummet to 2024 Levels Amid Crypto Market Weakness

The recent decline in the crypto market has led to a significant reduction in stablecoin reserves. According to data from CryptoQuant, the total reserve has decreased by 18.6% from $50.9 billion to $41.4 billion, falling back to levels last seen in 2024.

This trend is particularly evident on Binance, where over $10 billion has flowed out, leading to a decline in reserves for nearly four consecutive months. The exchange inflows have also dropped, from 192k to 66k over the past three weeks, indicating reduced market exposure and selling pressure.

The decrease in liquidity is expected to continue, with most potential funds sitting idle due to lack of conviction among investors. As a result, the market has faced only sell-side liquidity, further weakening it. Analysts point to a bearish trend, with low capital inflows and increased outflows dominating the market.

The Market Flow Strength Indicator on TradingView shows reduced capital inflows and increased outflows, while the Average Relative Strength Index (AVG RSI) is currently at 36, indicating low market demand. With liquidity remaining low, buying power is constrained, leaving the market unable to sustain another upside trend.