Stablecoin Inflows to Exchanges Have Surged, but Volatility Threatens Market Stability

Binance’s Declining Reserves

Stablecoin reserves on Binance, particularly USDT and USDC, have been in steady decline since January 2025—a sign of reduced buying power. Historically, Binance’s reserves have acted as a leading liquidity indicator, with previous bull cycles coinciding with strong inflows.

The Binance reserve weekly changes chart underlined a consistent downtrend in USDT reserves, with several weeks of negative flows. This depletion seemed to be in line with Bitcoin’s inability to sustain rallies above key resistance levels. Unlike past accumulation phases, where rising reserves fueled sustained uptrends, the prevailing trend suggests a lack of fresh capital entering the market.

If this drain continues, liquidity constraints could delay any major breakout. Conversely, a reversal in reserves could mark the return of stronger demand and renewed bullish momentum.