Bitcoin News Today: Bitcoin Price Consolidates as Stablecoin Supply Ratio Surges to 18.8 Signal Thinning Liquidity

Bitcoin’s recent price consolidation near $118,800 coincides with a surge in the Bitcoin Stablecoin Supply Ratio (SSR), a metric suggesting thinning liquidity in the market. The SSR, which measures Bitcoin’s market capitalization relative to stablecoin supply, has risen to 18.8 in recent weeks, indicating capital is shifting from stablecoins to Bitcoin. This shift, however, has created a liquidity imbalance, with market participants increasingly hesitant to push prices higher [1]. Analysts at CryptoQuant note that the SSR’s rise—from 9.39 to 10.48 in mid-July 2025—reflects a contraction in available dry powder for Bitcoin, as stablecoin liquidity has failed to keep pace with the asset’s market cap expansion [1].

The dynamics of stablecoin issuance further underscore this trend. Tether (USDT) added $8 billion in new supply in July 2025, yet $5.7 billion in stablecoins were simultaneously withdrawn from exchanges, according to data from Sentora. This divergence—where stablecoins are created but not redeployed into active trading—has exacerbated liquidity constraints. The outflows, the largest since early 2022, signal a risk-off sentiment as investors park capital in stable assets rather than circulating it through order books [2]. Such behavior limits Bitcoin’s ability to break out of its consolidation phase, as reduced liquidity curtails demand for further price gains [3].

The SSR’s historical correlation with Bitcoin’s price action reinforces this pattern. A rising SSR typically precedes periods of stagnation, as seen in July 2025 when the ratio peaked alongside Bitcoin’s $123,000 high. During this time, stablecoin outflows acted as a counterforce to Bitcoin’s upward momentum, creating a cap on its rally. This contrasts with November 2022, when a 10.89% surge in stablecoin supply coincided with a 3.72% rise in USDT’s value, fueling Bitcoin’s ascent. The current mismatch between stablecoin issuance and deployment highlights a shift in market psychology, where caution now dominates over optimism [2].

Analysts emphasize that Bitcoin’s near-term trajectory depends on restoring liquidity. A decline in the SSR would indicate renewed inflows into stablecoins, potentially signaling increased purchasing power for Bitcoin. However, until capital begins actively trading rather than remaining sidelined, the cryptocurrency’s upside potential remains constrained. The interplay between SSR and stablecoin flows serves as a barometer of market fragility, with elevated ratios acting as both a gauge and a brake on price momentum [1].

Source:

[1] [Bitcoin Remains Flat—And The SSR Ratio Might Explain Why] [https://www.newsbtc.com/bitcoin-news/bitcoin-flat-and-ssr-ratio-might-explain-why/]

[2] [Stablecoins are minting but not moving - Is crypto liquidity drying up?] [https://ambcrypto.com/stablecoins-are-minting-but-not-moving-is-crypto-liquidity-drying-up/]

[3] [Stablecoins are minting but not moving - Is crypto liquidity drying up?] [https://ambcrypto.com/stablecoins-are-minting-but-not-moving-is-crypto-liquidity-drying-up/]