Bitcoin’s Historical Liquidity Indicator Just Lit Up — Big Move Incoming?
Bitcoin is in a liquidity setup historically associated with big price rallies, as identified by CryptoQuant analyst Moreno. The Stablecoin Supply Ratio (SSR) has dropped back to the '13' range, a historical marker for market lows. Additionally, Binance data shows rising stablecoin balances and shrinking Bitcoin reserves, indicating potential accumulation by investors. Despite cautious market conditions and macroeconomic influences like US federal funding resolutions, Moreno believes the risk-to-reward ratio currently favors buyers. However, a breakdown of current liquidity metrics could signal increased volatility and deeper market resets.
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Bitcoin's Current Liquidity Setup
According to an analyst, Bitcoin sits in a liquidity set-up that has shown up before big rallies. However, prices are not shooting higher yet. At press time, Bitcoin trades around $104,500, down 0.5% over the past day. Earlier, traders observed a decline of about 1.8%, pushing the price near $103,400, and it briefly touched $102,850 during the move.
Stablecoin Signal Indicates Accumulation
CryptoQuant analyst Moreno highlights the Stablecoin Supply Ratio (SSR) as a key indicator. The SSR compares Bitcoin’s market cap to the total market cap of stablecoins and has dropped back into the 13 range. Historically, this level correlates with market lows in mid-2021 and various moments in 2024.
Reports show that when SSR fell to similar levels in the past, liquidity quietly built up, followed by buying after a period of low volatility.
Historical Liquidity Patterns Return
Moreno states, “We’re witnessing a liquidity configuration that has only appeared a handful of times since 2020, and each instance marked a pivotal moment for Bitcoin’s trajectory.”
This pattern, seen only occasionally over the years, has often led to significant surges in Bitcoin’s price, as traders take note of these pivotal setups.
Binance Trends and Exchange Metrics
The second metric analyzed by Moreno comes from Binance, showing that stablecoin balances are increasing while Bitcoin reserves are shrinking. Simply put, more cash-like tokens are being held on the exchange, while fewer BTC tokens remain stored there.
According to his analysis, this pattern has appeared only a handful of times since 2020. Each occurrence suggested a scenario where capital was waiting on the sidelines, with holders moving coins off exchanges for longer-term storage.
Market Conditions and Cautious Trading
The current crypto trading environment is described as cautious. While many investors expected positive momentum following news of the US Congress approving short-term federal funding through January 30, crypto failed to rally alongside other risk assets such as stocks.
Notably, large holders took profits after recent highs, while market momentum cooled off significantly. This dynamic highlights how macro events can influence capital flows without immediately triggering crypto buying.
Risks and Structural Support
Moreno warns that the current liquidity zone acts as a key structural support. If metrics like the SSR or exchange reserves break down decisively, it could indicate a deeper reset before any sustained recovery. In such a scenario, buying activity could be delayed, and volatility could increase sharply.
Though the outcome is uncertain, traders are closely monitoring these risks as they assess the market structure.
Outlook: Balanced Risks, Potential Upsides
Based on on-chain signals and reports, Moreno believes that risk-to-reward currently favors buyers. The growing stablecoin supply and declining BTC exchange reserves support this optimistic view.
Historical data suggests that the final three months of the year often lead to Bitcoin gains, but past behavior does not guarantee future outcomes. Moreno emphasizes that while the setup exists for a potential rally, a break below current levels could reshape market dynamics, forcing participants to rethink their positions and strategies.