The liquidity of the crypto market decreases in the run-up to the holidays

Cryptocurrency Market liquidity is tightening as a key measure of capital inflows shows a marked slowdown ahead of the holiday season.

Tether’s 60-day market cap change USDTthe largest in the world stable currencyhas fallen from $15.38 billion on Nov. 1 to $4.83 billion as of Monday, according to on-chain analytics platform CryptoQuant.

This sharp slowdown in the issuance of new stablecoins reflects a broader contraction in available capital, indicating that the market is entering a regime of low volumes and low liquidity typical of the Christmas period.

“Over the past month, stablecoin supply has effectively remained stuck between $285 and $290 billion, with some assets, including USDT, occasionally showing slight declines within this range,” Yaroslav Patsira, Fractional Director at CEX.IO, told me. Declutter. “This suggests that the funds are still in the ecosystem, they are just not being deployed aggressively.”

Patsira pointed to stablecoin exchange reserves – a measure of readily deployable capital – as evidence of this caution. Reserves recently reached an all-time high of $80 billion, before seeing an 11% drop to $94,000 during Bitcoin’s recent recovery, followed by a slight increase during this week’s sell-off.

While “dry powder exists,” Patsira said, he noted that “capital is cautious, waiting for lower prices or short-term exchanges without significant commitments.”

As a result, such an environment places a clear ceiling on potential profits.

For BitcoinAccording to Patsira, this means that liquidity is “still relatively resilient, but weakening, with maximum upside potential without renewed ETF demand or stablecoin expansion.”

Ethereum and other altcoins, which rely more heavily on capital rotation and robust risk sentiment, are even more sensitive to these tight conditions. On prediction market Myriad, owned by DeclutterAt parent company Dastan, users only have a 23% chance of an altseason in the first quarter of 2026.

What’s next for Bitcoin?

The crucial question is where prices will consolidate within this liquidity drought.

Bitcoin could continue to trade between its “true average” price – currently around $81,000 – and its short-term holder cost basis of around $102,000, the CEX analyst noted.

“A solution from consolidation can cut through both directions,” he said.

A break above the short-term base for holder costs could fuel a move to new highs, as seen in mid-2021, while the inability to hold support above the true average could point to deeper bearish momentum, similar to the first half of 2022.

While major macroeconomic factors such as the Federal Reserve’s interest rate decision have eased, the market is likely to continue its choppy, sideways trend without an injection of fresh, committed capital, experts said earlier. Declutter.

Despite expert comments, Myriad users remain bullish on Bitcoin, giving a 64% chance that the cryptocurrency will test $100,000 again instead of falling to $69,000.