Bitcoin (BTC) has recently recovered above $90,000, but the potential for sustained growth remains uncertain due to a stagnation in stablecoin supply. This lack of new liquidity could limit Bitcoin’s ability to continue its rally, especially with key economic data set to be released soon.
According to Glassnode data, the supply of the top four stablecoins—USDT, USDC, BUSD, and DAI—has barely increased over the past month, staying around $189 billion, with a marginal 0.37% rise. Stablecoins, which are typically pegged to the U.S. dollar, play a crucial role in providing liquidity to the crypto market. Their stagnant supply suggests that fresh capital is not flowing into the market as it did during previous bullish periods.
This slowdown contrasts with the surge in stablecoin liquidity seen during the November-December rally, which helped fuel Bitcoin’s rise to over $108,000. However, the current lack of new stablecoin inflows signals a potential cooling of market enthusiasm, which could limit the sustainability of Bitcoin’s recent gains.
The upcoming U.S. Consumer Price Index (CPI) report, expected to show a 0.3% increase in December, will likely influence market sentiment. A higher-than-expected inflation figure could dampen expectations for future interest rate cuts by the Federal Reserve, potentially putting additional pressure on risk assets like Bitcoin.
With stablecoin liquidity slowing down and economic uncertainty looming, Bitcoin’s rally could face headwinds, limiting its potential for further upside in the short term.
