Weekly Liquidity Analysis, It's Probably All Bad News

Key Overview

1) The total market value of stablecoins has decreased by $300 million, marking the first decline in nearly 6 weeks. Although USDT has increased by $260 million, it has all come from exchanges with other stablecoins.

2) There has been a net inflow of 14,000 BTC into exchanges, which was also the case in the previous week. This is not good news, especially considering the current FOMO sentiment and the surge of BTC to $44,000.

3) The open interest of Bitcoin futures contracts has been decreasing since December 6, with a $2 billion decrease last week. Particularly, the CME contracts, representing US funds, have also seen a sharp decline. Historically, a large reduction in CME's open interest at BTC's high levels has led to a significant downturn.

4) Overall, the data is not very positive. Take care, everyone.
Total Market Value of Stablecoins

Over the past week, the total market value of stablecoins has decreased from $1,251.9 billion to $1,248.8 billion, a reduction of $300 million. Among the major stablecoins, USDT has increased from $905.8 billion to $908.4 billion, with an issuance of $260 million. USDC has increased from $24.5 billion to $26.4 billion, with an issuance of 100 million coins. Other altcoins, mainly TUSD and BUSD, have decreased.

From the stablecoin perspective, this indicates unfavorable news.

1) After 6 consecutive weeks of increase, the total market value of stablecoins has experienced its first decline. In the previous 2 weeks, there was an increase of $500-600 million. In November, there was an issuance of $1 billion every week. However, after BTC surged to $44,000, there was a decrease.

2) Although USDT issued $260 million last week, it has decreased significantly compared to previous weeks. Moreover, this issuance is not the result of new capital inflow, but rather the exchange of other stablecoins, mainly TUSD and BUSD.
Stablecoin Situation on Major Exchanges

On Binance, USDT has increased from $19.41 billion to $19.79 billion, with a net inflow of $380 million. USDC has decreased from $7.29 billion to $6.99 billion, with a net outflow of $300 million. Overall, there has been a net inflow of $80 million in stablecoins on Binance over the past week, which is not significant. On OKEx, USDT has decreased from $4.96 billion to $4.89 billion, with a net outflow of $70 million. USDC has also seen a net outflow of $50 million. Overall, there has not been a particularly large fluctuation in stablecoins on exchanges.
Inventory of BTC/ETH on Exchanges

Over the past week, the quantity of BTC on exchanges has increased from 2.363 million to 2.377 million, with a net inflow of 14,000 coins. Ethereum has decreased from 141.9 million to 141.8 million, with a net outflow of 10,000 coins. There has not been a significant change in Ethereum, but there has been a relatively large net inflow of BTC, especially in the context of the extreme FOMO sentiment in the market last week.
BTC Futures Open Interest

The open interest of BTC futures contracts has been continuously decreasing. Specifically, after reaching $20.2 billion on December 6, it has been decreasing, with a $2 billion decrease overall last week. Similarly, the open interest of Bitcoin futures at CME has also seen a significant decline. CME represents large US funds, and its open interest had exceeded that of the 2017 bull market at the beginning of December. However, there has been a substantial decrease starting last week. Historically, a decrease in CME's open interest has led to a significant adjustment.