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Crypto Potato 2025-02-01 11:29:03

Bitcoin’s Next Rally Around the Corner as Stablecoin Liquidity Expands: CryptoQuant

Historical data has shown that growing stablecoin liquidity is associated with sustained gains in the crypto market. This means that bitcoin’s next rally could be around the corner because stablecoin liquidity is expanding. According to a CryptoQuant report , liquidity impulse for Tether (USDT) and USD Coin (USDC) have begun to expand again, with the latter experiencing a growth pace not seen in a year. Bitcoin Rally Around the Corner Since Donald Trump won the U.S. presidential election, liquidity conditions in the crypto market have improved . The total value of stablecoins in circulation has received a boost, which is often associated with a rally in prices. The total market cap of United States dollar-denominated stablecoins has surpassed the $200 billion mark and now sits at an all-time high of $204 billion. It crushed the $200 billion milestone last week. The market cap has increased by $37 billion since Trump emerged victorious in early November. USDT is the primary asset driving the expansion in stablecoin liquidity; however, USDC has also gained significant traction. USDT currently has a market cap of $139.4 billion, following a 15% ($19 billion) rise since November 4. On the other hand, the market cap of USDC has surged 48% (by $17 billion) over the same period and now hovers above $53.3 billion. USDT Deposits Grow on Exchanges CryptoQuant revealed that USDT’s liquidity impulse, which refers to the 30-day percentage change in market capitalization, has become slightly positive after declining by 2% in early 2024. USDC’s liquidity impulse has expanded much more, rising 20% for the first time in almost a year. “Historically, whenever the liquidity impulse is growing a rally in crypto prices follows…A further acceleration typically drives crypto prices higher,” the analytics platform stated. While stablecoins are growing, their liquidity expansion has extended to centralized crypto exchanges. The total value of USDT deposited on these trading platforms is now at record levels, rising from $30.5 billion on November 4 to $43 billion today. This represents a 41% increase ($12.5 billion). “The total value of stablecoins is an important source of liquidity for trading on exchanges, and its expansion is generally associated with higher crypto prices,” CryptoQuant added. The post Bitcoin’s Next Rally Around the Corner as Stablecoin Liquidity Expands: CryptoQuant appeared first on CryptoPotato .

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