The broader cryptocurrency market has shed $2 trillion since its October 2025 peak, with total market capitalization falling from $4.2 trillion to $2.1 trillion. On-chain data reveals a sharp 18.6% decline in stablecoin reserves held on exchanges, signaling a severe drop in investor liquidity and capital inflows that suggests continued market weakness.
The cryptocurrency market has experienced a sustained decline since its late 2025 peak. The total market capitalization has fallen by $2 trillion, dropping from $4.2 trillion to a low of $2.1 trillion.
Investors have largely retreated to the sidelines during this downturn as incoming liquidity has nearly dried up. Analyst Darkfost observed that stablecoin reserves on exchanges have fallen back to 2024 levels. The reserves have decreased from $50.9 billion to $41.4 billion.
Exchange liquidity is declining steeply, particularly on Binance, where reserves have fallen for nearly four consecutive months. More than $10 billion has flowed out of the largest exchange by trading volume, returning its reserves to October 2024 levels.
This trend is visible across all exchanges, with stablecoin inflows dropping significantly over recent weeks. When these inflows decline, it indicates greater selling pressure as investors exit or avoid the market.
The continued liquidity decline suggests most investors lack conviction to enter the current bearish market. Consequently, the market has faced only sell-side liquidity, further weakening prices.
Market indicators reflect this persistent capital outflow. The Market Flow Strength Indicator has remained negative for over 30 consecutive days, while the Average Relative Strength Index sits around 36 and approaches oversold territory.
Such extremely low levels for the AVG RSI indicate low market demand with outflows dominating. These conditions signal a prolonged period of weakness across the cryptocurrency sector.
