Liquidity Bitcoin Halving: Is Crypto’s Magic Cycle Finally Broken?
The crypto market is experiencing a decrease in liquidity, highlighted by a decline in stablecoin supply, ETF inflows, and DATs. The global stablecoin market cap has contracted for the first time in two years, with USDT supply slipping and market liquidity cooling. This suggests the end of the 'easy money' phase and reflects a shift from external capital inflows to a 'self-funding' model. Furthermore, the Bitcoin Halving is losing its historical influence on market cycles, with analysts questioning its correlation to liquidity trends. Adez Research argues that the current cycle may have peaked, predicting a correction phase unless significant liquidity injection occurs. While the market may face short-term pressure, this 'calm before the storm' phase could set the stage for a healthier, more sustainable bull market, driven by macroeconomic factors rather than speculative catalysts like the halving.
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Liquidity Is Drying Up: The Market’s Blood Flow Is Slowing
After months of steady expansion, the crypto market liquidity is starting to dry up. The strongest signal comes from the decline in stablecoin supply, often referred to as the “lifeblood” of the crypto ecosystem. This raises a crucial question: If liquidity is shrinking and Bitcoin Halving has lost its magic, what will drive the next crypto cycle?
According to DefiLlama, the total global stablecoin market cap dropped from $309 billion to $305 billion in November 2025, marking the first contraction after two years of continuous growth. This trend suggests that capital inflows are cooling off, potentially signaling weaker liquidity ahead.
Data from CryptoQuant shows that the USDT supply is starting to slip, often considered an early indicator that money is moving out of risk assets. Historically, Bitcoin (BTC) tends to face downward pressure during such periods. Meanwhile, reports from CoinGecko indicate that USDT circulation has stayed near $183 billion for the past three weeks with no major new issuance, contrasting sharply with mid-year’s aggressive “money injection.”
The slowdown is further evidenced by data from Wintermute, which highlights weak inflows into ETFs and DATs (Digital Asset Trusts). This widespread cooling of liquidity across various metrics suggests that the “easy money” phase of the crypto bull market could be ending, at least temporarily.
Halving Loses Its Magic: The End of the Traditional Bitcoin Cycle
For over a decade, the Bitcoin Halving has been the cornerstone of crypto bull markets, historically triggering major price rallies within 12 to 18 months of each event. However, many analysts in 2025 argue that the Liquidity Bitcoin Halving model, where halving aligns with liquidity expansion, might no longer be valid.
Instead, global liquidity—driven by the Federal Reserve (Fed) and ETF flows—is now seen as the real market catalyst, potentially extending this cycle into 2026. However, Adez Research disagrees, positing that large market makers (MMs) may be pushing this narrative, while real data does not support it.
“When institutional players coordinate narratives while the data shows otherwise, that’s your signal,” shared Adez. By analyzing historical cycles since 2013, they found no consistent correlation between the Fed’s balance sheet changes (QE/QT) and Bitcoin’s performance. Interestingly, BTC has shown upward and downward trends during both liquidity expansion and contraction phases, weakening the Liquidity Bitcoin Halving correlation thesis.
Current Cycle Analysis and Risks
According to Adez, the current cycle may have already peaked, with higher odds of a 50–70% correction than another 50-100% rally. Adez highlights that most key catalysts, including ETF approvals and pre-halving all-time highs, have already played out. Without a massive liquidity injection, the rally could fade into what they describe as a final distribution phase.
“Historical cycle patterns suggest completion approaching. The liquidity correlation thesis is empirically weak, major catalysts are exhausted, and the risk-reward ratio is asymmetrically negative,” Adez explained. Although there might be a slight extension, it wouldn’t indicate bullish movement but rather the culmination of this cycle.
Thus, the next major phase of Bitcoin growth will likely require a macroeconomic reset, involving lower interest rates, expanded global liquidity, and institutional capital returning to risk assets—a significant shift away from events like halving.
The Market Awaits Its Next Catalyst
With ETF inflows slowing, stablecoin supply shrinking, and the halving narrative losing steam, crypto has entered what some are calling a “calm before the storm” phase. This current quiet period, however, is not necessarily bearish. Analysts suggest it could represent a healthy reaccumulation phase before the next cycle begins.
In the short term, tightening liquidity might continue to apply downward pressure on Bitcoin and altcoins. However, in the long term, this could lay the foundation for a healthier bull market—one driven by real liquidity inflows and macroeconomic fundamentals, as opposed to speculative “halving pumps.”