The latest CryptoQuant Weekly Report reveals that stablecoin liquidity has reached a new high of $220 billion.

This surge is due to the expanding market caps of Tether (USDT) and USD Coin (USDC), which have fueled capital inflows into the broader crypto ecosystem.

Bullish Indicator For BTC

According to the April 30 report, USDT’s market cap rose by $2.5 billion, while USDC’s increased by $1.2 billion in the past week. Combined, the duo had a $3.7 billion rise in market cap, marking the strongest weekly growth in stablecoin supply since February 9.

Over the past 30 days, these figures have climbed even higher. USDT has added $5.3 billion while USDC surged by $6 billion in the same period. Both stablecoins are expanding above their 30-day moving averages.

Historically, this pattern has coincided with periods of increased liquidity and stronger performance in the broader crypto market. Specifically, this trend is a bullish indicator for Bitcoin (BTC).

Market sentiment has also improved with these liquidity changes. The Bitcoin Bull Score Index, which tracks investor sentiment and market strength, rose from 20 last week to 50 this week, with the new score placing the market in neutral territory.

According to the analytics firm, the metric’s increase shows the impact of rising stablecoin liquidity on Bitcoin’s recent move above key on-chain resistance levels. However, the index remains below 60, the level typically associated with sustained price rallies.

The flagship cryptocurrency has rebounded strongly over the past three weeks, rising by more than 25% from its April 9 low of just under $74,000 to over $96,500 in early May.

On the other hand, Bitcoin advocate Robert Breedlove recently pointed to the average miner cost of production as a potential sign that the asset is nearing the start of a bull run. He noted that this metric, often seen as the market’s break-even line, has historically marked cycle bottoms and is once again indicating a possible price floor.

USDT Lags, USDC Hits Exchange High

Despite the record-breaking levels, USDT liquidity on crypto exchanges has not fully recovered. The total amount of the digital asset held on exchanges is currently $38 billion. This is 12% lower than its February 21 high of $43 billion.

On the other hand, USDC balances on exchanges have reached $6.5 billion, their best level since March 2023. Exchange-based stablecoin reserves are important because they can be used quickly for trading and investment, helping support price activity in digital assets.