Bitcoin’s recovery momentum is facing renewed pressure as shrinking stablecoin supply limits liquidity across the digital asset market, according to analysts at Matrixport.
The firm highlighted that stablecoins serve as the primary liquidity bridge within crypto markets. When supply growth stalls or reverses, it often signals that capital is flowing back into fiat currencies rather than remaining inside digital asset ecosystems. Since the beginning of 2026, total stablecoin supply has reportedly declined by approximately 5.6 billion dollars, falling from 159 billion dollars to about 153.4 billion dollars.
This contraction comes at a time of heightened global uncertainty, with investors increasingly rotating into traditional safe haven assets. As risk appetite weakens, liquidity available for bitcoin and altcoins tightens, limiting upside potential even during short term rebounds.
Exchange data reinforces the liquidity slowdown. Stablecoin reserves on Binance have dropped nearly 19 percent since November 2025. Lower reserves typically indicate reduced trading capital sitting on exchanges, which can amplify volatility and weaken sustained buying pressure.
Matrixport analysts warned that if outflows persist, bitcoin could continue facing a liquidity shortfall. While regulatory developments such as the proposed Clarity Act have been viewed as potential catalysts for renewed institutional engagement, analysts emphasized that regulation alone will not revive the sector. Fresh capital inflows and genuine demand are required to support a durable recovery.
Broader macroeconomic conditions add another layer of complexity. A contributor at CryptoQuant noted that current liquidity conditions are unlikely to improve in the near term. Federal Reserve commentary suggesting that strong labor market data could justify maintaining current interest rate levels has reinforced expectations of prolonged tight monetary policy. Higher rates typically dampen flows into risk assets, including cryptocurrencies.
Meanwhile, analysts at Glassnode observed that bitcoin’s realized profit and loss ratio has fallen below 1 for the first time since 2023. This shift indicates that market participants are realizing more losses than profits, a condition historically associated with extended consolidation periods. Previous cycles suggest such phases can last six months or longer before fresh capital begins reentering the market.
At the time of writing, bitcoin was trading near 62900 dollars, down roughly 5 percent over the past 24 hours. Technical analysts have flagged the 60000 dollar level as a critical support zone. A decisive break below that threshold could open the door to deeper corrections, with some market observers projecting downside scenarios toward the mid 40000 dollar range if selling accelerates.
For now, stalled stablecoin growth underscores a central theme: without renewed liquidity, bitcoin’s path to sustained recovery may remain constrained.
