Analysts have pointed out the connection between stablecoin liquidity and Bitcoin price movements, suggesting that stablecoins serve as liquidity proxies.

Despite the bullish trend, the market remains volatile; on December 20, 2024, over $1 billion in leveraged positions were liquidated, causing Bitcoin's price to drop over 8% to below $96,000.

Earlier this month, Bitcoin's price soared to an all-time high of $108,000, driven by the combination of high demand and dwindling supply.

Accumulator addresses, which consistently buy Bitcoin without selling, are currently accumulating at a record rate of 495,000 BTC per month, further intensifying the liquidity crunch.

However, Bitcoin's price experienced a decline following the Federal Reserve's indication of a more hawkish monetary policy, pushing it below the key psychological level of $100,000.

In 2024, sell-side liquidity has plummeted by 678,000 BTC, creating a tighter market environment as demand for Bitcoin surges.

Currently, only 3.397 million Bitcoins are available for sale, marking the lowest supply level since October 2020, according to CryptoQuant.

Since late September, Bitcoin demand has been in 'expansion territory,' with a notable monthly increase of 228,000 BTC.

The market capitalization of USD-based stablecoins, including Tether and USD Coin, has increased by 20% to reach $200 billion, indicating a significant influx of new capital into the crypto market.

Macroeconomic factors, particularly expectations of pro-cryptocurrency policies under a new U.S. administration, are shaping market dynamics and investor sentiment towards Bitcoin.