The market capitalization of stablecoin USDT has fallen by $6.6 billion over the past 60 days. It is a sign that liquidity in the cryptocurrency market is continuing to shrink.
CryptoQuant, an on-chain data analytics firm, said in a recent report that the decline was larger than the outflows seen immediately after the FTX collapse in December 2022. CryptoQuant views stablecoin supply as a key indicator of potential buying power in the cryptocurrency market. If supply keeps falling, it means there is less money available to buy bitcoin.
CryptoQuant estimated bitcoin demand has fallen by 284,000 over the past 30 days. It is the biggest drop since March 2025. The Coinbase premium index logged 30 straight days in negative territory, which is interpreted as meaning U.S. spot demand remains weak.
The report pointed out that similar demand declines have appeared in the past when bitcoin periodically bottomed out. But CryptoQuant assessed that bitcoin prices could fall further because stablecoin liquidity is still shrinking and U.S. spot buying has not recovered.
