Liquidity is tightening across markets — and crypto is feeling the squeeze. What’s happening - Stablecoins: The market-cap of stablecoins has dropped by nearly $10 billion since the 2026 cycle began, a clear sign investors are becoming more cautious. - Ethereum: ETH — the most liquid chain and home to over 50% of stablecoin supply — is still down about 6% year-to-date, underscoring the broader pullback in crypto liquidity. - DeFi: Total value locked (TVL) has tumbled roughly $20 billion, returning to pre-election levels, per DeFiLlama — evidence that capital is leaving DeFi and not flowing in like it once did. Why the Fed matters now This fragile liquidity backdrop made the Federal Reserve’s recent $16 billion liquidity injection this week especially impactful. The move came on the heels of cooler U.S. CPI readings, and the fresh cash was enough to spark risk-on activity across markets. Crypto commentators tell a similar story: with liquidity having pulled back sharply, even modest inflows can have outsized effects. Macro vs. safe-haven: BTC, Gold and the ratio Zooming out, the traditional safe-haven Gold (XAU) has gained roughly 14% year-to-date. Bitcoin has lagged: BTC corrected about 22% over the same stretch, widening Gold’s relative strength. That divergence has pushed the BTC/Gold ratio to extremes — TradingView data shows the monthly BTC/Gold RSI at an 11-year low, and the ratio has printed seven consecutive red monthly candles for the first time. What analysts are saying Market observers are calling this a rare opportunity for Bitcoin, arguing the timing of the Fed’s liquidity injection could give bulls the edge needed to ignite a rally in risk assets. The low-liquidity environment in crypto means even small capital inflows could prove meaningful. Still, most analysts emphasize fundamentals must improve before sustained price recovery follows. Bottom line Crypto markets are operating with thinner liquidity and heightened sensitivity to macro moves. The Fed’s $16 billion injection and an unusually weak BTC/Gold ratio have created conditions some see as opportunistic — but with capital flows muted and fundamentals still in focus, volatility and risk remain high. Sources and note Data referenced from DeFiLlama and TradingView; analysis and commentary published by AMBCrypto. This content is informational only and not investment advice — trading cryptocurrencies is high risk; do your own research before making decisions. © 2026 AMBCrypto. Read more AI-generated news on: undefined/news

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