Crypto’s growth engine stalls as Wintermute warns of ‘recycled liquidity’

💡 DMK Insight

Crypto liquidity is stalling, and here’s why that matters: stablecoin and ETF inflows have plateaued, signaling potential stagnation in market activity. When liquidity dries up, it can lead to increased volatility as traders react to fewer available assets. This internal recycling of liquidity means that traders might struggle to find new capital to drive prices higher. If you’re trading on momentum, this could be a red flag. Watch for any shifts in trading volume or significant price movements that could indicate a breakout or breakdown. On the flip side, this stagnation could present opportunities for savvy traders who can identify undervalued assets amidst the noise. Keep an eye on key support and resistance levels across major cryptocurrencies, as these could be tested more frequently in a low-liquidity environment. Overall, monitor the broader market sentiment and any news that could reignite inflows, as that will be crucial for the next moves in crypto.