On-chain data from CryptoQuant suggests that the buying power provided by stablecoins has not yet returned in a meaningful way, despite a recent uptick in net exchange inflows. The analysis, conducted by Novaque Research, highlights a mixed liquidity environment where short-term movements remain at odds with a longer-term downtrend in exchange reserves.
Exchange net flows of ERC-20 stablecoins have shifted slightly positive, currently around $62.8 million. However, this figure is insignificant compared to the multi-billion-dollar inflow waves observed earlier in the cycle. At the same time, minting and redemption activity has cooled, with both sitting near $1.5 billion — a clear sign that the creation of fresh stablecoin supply has stalled after the surge seen in early 2025.
More telling is the continued decline in stablecoin reserves on exchanges. Total ERC-20 stablecoin holdings have dropped to approximately $61.8 billion, well below the late-2025 peak above $75 billion. The balance also remains beneath the declining 100-day moving average, reinforcing the bearish reserve trend. Novaque Research cautioned that ongoing reserve contraction would make future rallies more reliant on leverage and external capital flows, rather than solid stablecoin liquidity.
The report stops short of a firm directional call, characterizing the near-term outlook as neutral to mildly constructive. For a clearer bullish signal, analysts would need to see exchange reserves stabilize and minted supply consistently outpace redemptions. Until then, the market may lack a strong capital cushion to sustain upward moves.
