Bitcoin Faces $70K Test as Stablecoin Supply Drops

Bitcoin is facing a new liquidity crunch that threatens its recent recovery. Stablecoin supply has shrunk by $14.2 billion over the past month. This marks the sharpest decline recorded since June 2022.

Apparent demand for the digital asset has fallen by 284,000 Bitcoin units in 30 days. The metric has reached levels similar to those seen during the market turbulence of March 2025. This scenario leaves the price vulnerable to a test of the $70,000 mark.

Investors who bought at higher levels may increase selling pressure. The lack of new capital inflows makes it difficult to reverse this trend. The current situation marks a sharp reversal from the previous period of liquidity expansion.

Data shows that Tether has lost $6.6 billion in market value over the last 60 days. The volume of the decline is more than double what was recorded following the FTX collapse in December 2022. Growth in the supply of dollar-pegged tokens peaked in December 2024.

The reduction in global crypto liquidity could increase Bitcoin volatility if demand for risk assets continues to decline.