Crypto liquidity continues to shrink as stablecoin market cap falls

Liquidity in the cryptocurrency market continues to contract, Cointelegraph reported. The outlet noted that over the past 30 days, the market capitalizations of USDC and USDT have decreased by 3.6% and 2%, respectively. This decline in the stablecoin market cap has been an ongoing trend since November of last year, indicating that more capital is flowing out of the market than in. As stablecoins are typically minted to meet rising demand and burned when demand falls, their supply serves as a key indicator of market demand and liquidity flows. The current environment suggests that liquidity constraints are continuing to tighten.