Crypto Market Liquidity Contracts Ahead of Holiday Season 2025
The cryptocurrency market is experiencing a notable contraction in liquidity as the holiday season approaches in late 2025. Data shows that the 60-day growth of the USDT market capitalization dropped significantly from $15.38 billion on November 1 to $4.83 billion by December 16, signaling reduced new capital inflows into crypto markets.
Meanwhile, stablecoin exchange reserves, which peaked at $80 billion during Bitcoin's surge to $94,000, have declined by 11%, though recent sell-offs have seen a slight increase, reflecting cautious capital deployment. Analysts highlight that while dry powder exists in reserves, the capital remains conservatively deployed, thereby limiting upward momentum in the market.
Stablecoin supply has been confined within a narrow range of approximately $285 billion to $290 billion, indicating tightened market liquidity. Bitcoin liquidity has remained relatively resilient but shows signs of weakening. Without renewed demand from ETFs or an expansion in stablecoin supply, Bitcoin's upside appears capped.
Price dynamics suggest that Bitcoin could fluctuate between its true mean price near $81,000 and the short-term holder cost basis around $102,000. A decisive breakout above this range might pave the way for new price highs, whereas failure to maintain support levels may signal bearish momentum.
Altcoins and Ethereum are observed to be more sensitive to capital rotation within the market. Forecast models, such as Myriad, indicate a 23% probability of an altseason occurring in the first quarter of 2026.
