Why Stablecoins Could Mark a Turning Point for Crypto

The total crypto market has fallen 12.3% in November, plunging to a four-month low as major assets continue extending their losses.

Yet one metric is moving sharply higher: stablecoin exchange reserves. The sustained rise is drawing attention across the industry, with analysts suggesting that sidelined capital may be quietly preparing for the next major move.

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Stablecoin Reserves Rise as Crypto Market Hits 4-Month Low

Despite earlier optimism for a strong Q4, the crypto market is charting a very different trajectory. After a nearly 9% decline in October, the downturn has deepened this month. 

Since November 1, total market capitalization has fallen from around $3.6 trillion to $3.19 trillion during early Asian trading hours today. This level was last touched in early July.

Bitcoin (BTC) has struggled to hold key psychological levels, slipping below $100,000 several times throughout November. In today’s session, it extended its slide and briefly dropped under $97,000 for the first time since May 8. At press time, BTC traded at $97,426.

Ethereum (ETH) is facing similar pressure. The second-largest cryptocurrency has shed 17.2% of its value this month. The altcoin was trading near $3,200 at the time of writing.

At the same time, stablecoin reserves on exchanges are rising. CryptoQuant data indicates an inflow of approximately $2.63 billion in November.

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With prices falling, the increase may indicate that traders are rotating into stablecoins as a defensive move. However, the trend becomes more meaningful when paired with declining stablecoin withdrawals.

CryptoQuant analyst Maartunn highlighted that earlier, as Bitcoin approached $125,000, withdrawals surged above 72,000. Now, the trend is slowing. This suggests that holders are intentionally keeping stablecoins on exchanges rather than moving them off-platform.

This large amount of “dry powder” sitting on exchanges is widely viewed as a strong bullish signal. Capital parked on the sidelines creates significant potential for a fresh wave of buying once sentiment shifts, raising the likelihood of a renewed rally in Bitcoin and the broader altcoin market.

“Stablecoins are piling into exchanges. This is one of the clearest signals that fresh capital is gearing up to deploy. The last time inflows spiked like this, it marked the start of a major risk on move across the entire market,” analyst Milk Road posted.

Nonetheless, Swissblock added that, despite the buildup of liquidity, investors are not rushing back into Bitcoin just yet. The largest cryptocurrency is currently trying to hold the $97,000–$98,500 support area. 

According to Swissblock, sidelined capital typically flows back into Bitcoin under two conditions: either a capitulation move pushes BTC down toward $95,000, creating an attractive entry point, or Bitcoin stabilizes and regains the $100,000 level, signaling strength and a safer environment for buyers.

Overall, while the market remains under pressure, the growing stockpile of stablecoins on exchanges suggests that investors are not abandoning crypto — they are waiting. If conditions stabilize or Bitcoin triggers a key technical level, this sidelined liquidity could quickly become the fuel for the next market rebound.