Jiang Zhuoer, founder of the BTC.top mining pool, has cautioned that the recent decline in stablecoin supply should not be interpreted as the start of a new bull market. In a detailed analysis, Zhuoer pointed to a significant reduction in the market capitalizations of major stablecoins over the past month.
Data shared by Zhuoer shows Tether's (USDT) market cap dipped from $184.2 billion to $183.1 billion, while USD Coin's (USDC) fell from $73.28 billion to $72.15 billion — a combined outflow of approximately $2.23 billion. These outflows, he argues, reflect a broader risk-off sentiment rather than a strategic repositioning ahead of a sustained rally.
Zhuoer emphasized that the shrinkage in stablecoin supply signals weak new capital inflows, and current funding conditions are insufficient to support a bull market. He acknowledged that Bitcoin could see a short-term price bounce to between $68,000 and $70,000, potentially liquidating accumulated short positions. However, he warned that any such upward move would likely be followed by a final decline, resuming the overarching downtrend.
This cautious perspective challenges the common narrative that stablecoin outflows automatically herald a bull phase. Instead, Zhuoer highlights the importance of distinguishing temporary liquidity shifts from fundamental market trends, advising investors to consider broader indicators like regulation, macroeconomic conditions, and institutional adoption.
