Bitcoin Stablecoin Liquidity Setup Returns To 2021 Levels – A Historic Signal Reappears

Bitcoin has regained critical levels after a week of intense selling pressure, sparking renewed optimism across the market. Despite uncertainty among traders, key on-chain data from CryptoQuant suggests that a new surge may be brewing — provided current momentum continues to build.

According to top analyst MorenoDV, Bitcoin is entering a liquidity configuration that has only appeared a handful of times since 2020, each marking a pivotal turning point in the cryptocurrency’s trajectory. He explains that when stablecoin reserves reach extreme levels relative to Bitcoin’s market cap, the market rarely stays quiet for long.

This setup typically signals an imbalance between available liquidity and Bitcoin’s valuation — meaning that a large pool of “dry powder” is sitting on the sidelines, waiting to be deployed. Historically, such conditions have preceded strong directional moves, either upward or downward, depending on how confidence returns to the market.

Stablecoin Liquidity Suggests a Critical Turning Point for Bitcoin

According to MorenoDV, one of the most important indicators to watch right now is the Stablecoin Supply Ratio (SSR) — a metric that compares Bitcoin’s market cap to the total market cap of all stablecoins. When SSR drops, it means stablecoin liquidity is expanding relative to Bitcoin’s value — or, in simpler terms, there’s more “dry powder” sitting on the sidelines waiting to be deployed.

Currently, the SSR has fallen back to its lower historical range around 13, the same zone that marked market bottoms in mid-2021 and again throughout 2024. In each of those instances, Bitcoin was consolidating quietly before launching into strong recovery rallies.

A similar pattern can be seen in the Binance Bitcoin/Stablecoin Reserve Ratio, which shows stablecoin reserves rising while BTC reserves continue to decline. This dynamic often signals that investors are positioning capital for accumulation — a sign of seller exhaustion and structural capitulation where weak hands exit, and strong hands begin quietly rebuilding positions.

MorenoDV notes that from a risk/reward standpoint, these phases historically present asymmetric opportunities — limited downside, but expanding upside as liquidity rotates back into Bitcoin.

Still, this zone acts as both an accumulation opportunity and a final support line. If these liquidity levels hold, Bitcoin could soon see another upward impulse toward new highs. But if they break decisively, it may confirm the end of the current cycle’s structure and trigger a deeper revaluation phase before the next growth leg begins.

Holding the Line Above $100K

Bitcoin continues to defend the $100K–$105K range, a key structural zone that has served as both support and consolidation throughout the cycle. On the weekly chart, BTC remains above its 50-week moving average (blue line) — a level that has historically acted as a springboard for mid-cycle recoveries.

The current candle shows a mild rebound after testing the $104K region, signaling that bulls are attempting to regain control. However, volume remains subdued compared to previous rallies, indicating a cautious tone among market participants following recent liquidations.

A decisive close above $108K–$110K would strengthen bullish momentum and confirm a potential continuation toward the $115K–$120K resistance zone. Conversely, losing the 50-week MA could trigger a retest of lower supports near $95K–$98K, marking a deeper correction phase.

Despite the mixed sentiment, the structure remains intact within a broader uptrend. The long-term moving averages — particularly the 100-week (green) and 200-week (red) — continue to slope upward, confirming that Bitcoin’s macro trend is still bullish.

Featured image from ChatGPT, chart from TradingView.com