High supply of stablecoins, low cash flow; Is the market correction temporary or continuous?

While the supply of stablecoins remains at historically high levels, liquidity in the crypto market has slowed, analysts at Matrixport warn.

This situation means a reduction in new investment and a classic sign of buyer fatigue. At the same time, Bitcoin price is down 3% on the day, reaching around $85,860 and struggling to break through key moving averages.

Although the combined market capitalization of Tether (USDT) and USDC (USDC) is now more than $260 billion, Matrixport analysts emphasize that liquidity inflows have slowed to maintain price momentum, and most capital has either remained dormant or moved to profitable instruments.

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The main reason for this issue is the cautious policy of the Federal Reserve in the field of interest rate reduction, as well as increasing concerns about interest rate hikes in Japan.

The market’s reaction to these conditions is defensive and slow; Bitcoin has lost its upward trend for the first time in recent months, and there is a possibility that the price will continue to correct until a new stimulus emerges.