Matrixport analysts highlight stablecoin supply stagnation as a key barrier to Bitcoin's recovery amid ongoing liquidity challenges.
As global market uncertainties drive investors to seek safe-haven assets, the crypto market is experiencing a liquidity squeeze. Analysts at Matrixport highlight the stagnation in stablecoin supply as a significant barrier for Bitcoin’s recovery and the broader crypto ecosystem.
“Stablecoins are the primary liquidity channel in digital assets, and stagnation often indicates that capital is flowing back into fiat rather than remaining in the crypto market,” Matrixport experts stated.
Since the start of 2026, stablecoin supply has contracted by $5.6 billion, dropping from $159 billion to $153.4 billion. Additionally, stablecoin reserves on Binance have decreased by 19% since November 2025.
Matrixport warns that continued capital outflows could exacerbate liquidity issues for Bitcoin. Furthermore, even with the potential passage of the Clarity Act, which addresses market structure, experts believe that mere regulatory changes won't suffice to invigorate the market without actual demand and capital influx.
Market Outlook
Darkfost, a contributor at CryptoQuant, notes that liquidity conditions are unlikely to improve soon. He referenced comments from Federal Reserve member Christopher Waller, suggesting that strong labor market data could lead to sustained interest rates, which typically limits capital inflows into riskier assets.
“Such monetary policy typically restrains capital inflows into risk assets,” he remarked.
According to Glassnode analysts, liquidity recovery may not occur for at least six months. They pointed out that the realized profit/loss ratio has recently fallen below 1, indicating a shift into a regime of excessive loss realization—historically, such periods have lasted over six months.
As of now, Bitcoin is trading at approximately $62,900, reflecting a 5% decline over the last 24 hours. Analysts from Bitrue have predicted that Bitcoin could drop to $47,000 if it falls below the $60,000 mark.
