The altcoin market is facing a constrained recovery as trading volumes retreat and capital outflows accumulate. The total crypto market cap remains below $3 trillion, around $2.82 trillion, while major exchanges report roughly $1.118 trillion in total trading volume this month. Industry commentary notes that many altcoins trade 70–90% below their all-time highs, with little buying interest. ERC-20 stablecoin supply has declined from about $161.3 billion to around $153.6 billion, a drop of roughly $7 billion (about 4.8%).
Concurrent, stablecoin holdings on major exchanges fell from about $745 billion to $679 billion, a decrease of roughly $67 billion (about 9%). As investor participation remains subdued, the flow of stablecoins’ liquidity also weakens. CryptoQuant data indicate both ERC-20 stablecoins and exchange-held stablecoins have been trending down, signaling tightening liquidity and less immediate fuel for future buys.
Regulatory uncertainty around stablecoins compounds sentiment; Matrixport notes GENIUS Act and CLARITY Act could limit interest payments by stablecoin issuers, prompting funds to shift toward traditional safe assets like gold and silver. This dynamic compresses liquidity and dampens near-term buying pressure for digital assets. AXS surged about 140% since the 13th, with intraday gains up to 260% earlier this month, though it has since entered a short-term correction. Small-cap alts such as SAND and MANA have risen but retraced most gains, and analysts warn that rallies in thin liquidity may be unsustainable without core assets stabilizing.
Leave a Reply