Stablecoin supply falls $14.2B in biggest 30-day drop since June 2022
Crypto markets were left with “less fuel” to rally after the market cap of major stablecoins saw its biggest 30-day drop in over four years.
Stablecoin supply fell by $14.2 billion over 30 days, the biggest drop since June 2022, according to Glassnode.
Key points:
- The total supply of stablecoins fell by $14.2 billion over the 30 days to Nov. 11, the largest 30-day drop since June 2022.
- Tether (USDT) is trading slightly below it sUS dollar peg.
- The Coinbase Premium Index remains negative after dropping to its lowest level in four years at the end of October.
The rolling 30-day contraction stablecoin supply hit $14.2 billion this week, more than the $9.5 billion drop seen as Bitcoin (BTC) fell below $58,000 on July 1. It also marks the most pronounced drawdown since June 2022, when supply fell by nearly $30 billion.
Selected stablecoin supply data. Source: Glassnode
Stablecoin liquidity is a key yardstick for gauging crypto market sentiment.
“A shrinking supply means holders are redeeming stablecoins for dollars and taking that cash out of the market, which leaves less fuel for a rally,” Glassnode commented.
USDT, the largest stablecoin by market cap, continues to trade slightly below its $1 peg, per data from TradingView. Glassnode attributes the phenomenon to the “same pressure” from investors rotating out of the stablecoin market.
“Should the 30-day change turn back to growth, it would be the first sign that new money is coming in,” it added.
USDT/USD one-day chart. Source: Cointelegraph/TradingView
Crypto market metrics continue to point to weakening demand as Bitcoin trades near 11-week lows.