The latest CryptoQuant Weekly Report indicates that stablecoin liquidity has achieved a remarkable milestone, reaching $220 billion. This upward trend is primarily attributed to the growing market capitalizations of Tether (USDT) and USD Coin (USDC), which have led to significant capital inflows into the broader cryptocurrency ecosystem.
Bullish Indicator For BTC
According to the April 30 report, USDT’s market cap increased by $2.5 billion, while USDC’s rose by $1.2 billion in just one week. The combined market cap of these two stablecoins experienced a $3.7 billion surge, marking the most substantial weekly growth in stablecoin supply since February 9.
Over the past month, these trends have become even more pronounced. USDT has gained $5.3 billion, and USDC has surged by $6 billion during this period, both stablecoins remaining above their respective 30-day moving averages.
Historically, similar patterns have coincided with heightened liquidity and stronger performance across the cryptocurrency market, specifically serving as a bullish indicator for Bitcoin (BTC).
Market sentiment has shown improvement alongside these liquidity changes. The Bitcoin Bull Score Index, which measures investor sentiment and market momentum, has jumped from 20 last week to 50 this week, placing the market firmly in neutral territory. This rise in the index underscores the influence of increasing stablecoin liquidity on Bitcoin’s recent ascension beyond critical on-chain resistance levels. Nevertheless, the index remains below 60, a threshold often associated with sustained rallies in price.
Bitcoin has demonstrated a robust rebound over the past three weeks, boasting a rise of more than 25% from its low of just under $74,000 on April 9 to exceeding $96,500 in early May.
In a related perspective, Bitcoin advocate Robert Breedlove recently highlighted the average miner cost of production as a potential indicator that Bitcoin is approaching the onset of a bull run. This metric, perceived as the market’s break-even point, has historically denoted the bottoms of cycles and once again suggests a possible price floor for the asset.
USDT Lags, USDC Hits Exchange High
Despite this record-breaking achievement, USDT liquidity on cryptocurrency exchanges has yet to fully recover. Currently, there are $38 billion worth of USDT held on exchanges, which is 12% lower than its peak of $43 billion recorded on February 21.
In contrast, USDC balances on exchanges have reached a high of $6.5 billion, marking their best performance since March 2023. Exchange-based stablecoin reserves are vital as they can be readily utilized for trading and investments, thereby supporting price movements in digital assets.
The insights drawn from this report suggest that a closer analysis of stablecoin liquidity could provide valuable insights into the future movements of Bitcoin and the overall cryptocurrency market.
The post Stablecoin Liquidity Reaches Record High $220B: Report appeared first on CryptoPotato.
