The outlook for Bitcoin’s price is becoming more favorable as there is a notable increase in stablecoin liquidity, with the USDT market capitalization growing by $5.75 billion over the last two months.
A recent update on X highlighted that this rise exceeds the 60-day simple moving average of $3.46 billion. During the same period, the overall stablecoin market has also surged by 11%, moving from $203.9 billion to $226.1 billion.
Historically, such inflows of stablecoins have indicated the arrival of new liquidity into the cryptocurrency market, often facilitating rebounds in Bitcoin’s (BTC) price.
Data from Santiment also indicated a six-month peak in Tether’s (USDT) on-chain activities, with over 143,000 wallets conducting transfers just on March 11. Santiment notes that previous surges in stablecoin usage during market declines have often been precursors to recoveries, suggesting that traders may be gearing up for a potential market turnaround.
Many experts are optimistic that the increase in liquidity could contribute to a broad market recovery, even though Bitcoin’s short-term price behavior remains unpredictable. Bitcoin is currently feeling the pressure after a nearly 30% drop from its all-time high of $109,000 in January, trading at $81,712 at the time of writing.
A market analysis from March 12 suggests that Bitcoin may be nearing an oversold condition, a scenario that has historically led to price recoveries.
In March, the proportion of Bitcoin held for less than a month increased to 23%, comparable to a spike observed in December 2024. Both instances were followed by price corrections, leading the Market Value to Realized Value ratio down to 1.8, approaching its 2024 low of 1.71.
The MVRV ratio serves as an indicator for assessing whether Bitcoin is overpriced or underpriced by comparing its market value to the average acquisition cost of all coins. Should Bitcoin decline into the $70,000 range, the ratio could align with previous cycle lows, potentially signaling a price rebound.
Nevertheless, market sentiment remains tenuous. According to Santiment, significant Bitcoin holders—those with 100 to 1,000 BTC—have liquidated more than 50,600 BTC over the past week, equating to around $4.07 billion in sell-offs.
On a positive note, the number of Bitcoin holders is still near its all-time peak of 54.72 million, suggesting that the network continues to expand despite these challenges. Ultimately, Bitcoin’s capability to withstand selling pressure while capitalizing on growing liquidity and historical recovery trends will determine the market’s next steps.