Santiment analysts report that over the last week and a half, the market for the twelve leading stablecoins shed $2.24B. This capital outflow coincided with a Bitcoin price correction. Santiment data confirms a painful trend for bulls: investors are closing positions and pulling money out of crypto entirely.
Shift to Real Assets
As the crypto market faces turbulence, gold and silver are hitting all-time highs. Investors clearly prefer safe physical defensive assets over risky digital ones.
The key point is that money is not parking in stablecoins. Typically, traders exit to USDT or USDC to wait out the storm and quickly re-enter the market. Now, they are cashing out to fiat. This means there is simply no free liquidity available to quickly buy the dip.
Pressure on Altcoins
Shrinking stablecoin supply deprives the market of fuel. Buying power is dropping, causing any rebound attempts to be weak and short-lived.
In this scenario, altcoins suffer the most — during a liquidity crunch, risky assets always lose value faster than Bitcoin. Analysts believe that a full market reversal will only begin after the stablecoin market cap resumes growth, signaling an influx of fresh capital.
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