The crypto and US equities markets started the week on the worst possible note, reacting negatively to the launch of the Chinese AI platform DeepSeek. Despite the initial downturn, the Bitcoin price has since returned above the $100,000 level, moving mostly sideways to close the week.

According to a recent on-chain report, liquidity on centralized exchanges has reached a new record high, suggesting that crypto bulls now have increased buying power. The question is — can this fresh buying power push the Bitcoin price to a new high?

Impact Of Growing Stablecoins On Crypto Prices

In its latest weekly report, blockchain intelligence firm CryptoQuant revealed liquidity in the crypto market has experienced a significant boost since the US Presidential election in November 2024. Liquidity in crypto is measured by the total value of circulating stablecoins, which recently reached a new all-time high.

According to data from CryptoQuant, the market capitalization of dollar-backed stablecoins surpassed the $200 billion mark last week and is currently at $204 billion, a record high. This value represents an over 22% expansion since Donald Trump’s victory in the US elections.

One major contributor to this growth is Tether’s USDT, which accounts for nearly 70% of the USD-denominated stablecoin market. USDT’s market cap currently stands at around $139 million, reflecting a 15% increase since November last year.

Source: CryptoQuant

Interestingly, this expansion has been mirrored in the stablecoin balances of centralized exchanges, with the total amount of USDT on these trading platforms now at record levels. CryptoQuant revealed that the market cap of USDT on centralized crypto exchanges has increased from $30.5 billion to $43 billion in the past three months, representing a 41% increase.

Dollar-backed stablecoins are an important source of liquidity for trading on centralized exchanges. Hence, an expansion in the stablecoin supply of exchanges implies an increase in the buying power of crypto investors.

“The next leg up for Bitcoin and crypto prices could be around the corner, as the stablecoin liquidity impulse starts to expand again,” CryptoQuant noted. Moreover, a growing stablecoin market cap — especially on centralized exchanges — is historically correlated with higher Bitcoin prices.

CryptoQuant added:

USDT’s liquidity impulse (30-day % change in market capitalization) is now slightly positive after contracting by 2% at the start of 2025. A further acceleration typically drives crypto prices higher. Meanwhile, USDC’s liquidity impulse is expanding by 20%, its fastest pace in at least a year.

Bitcoin Price At A Glance

As of this writing, Bitcoin is valued at around $102,400, reflecting an almost 2% decline in the past 24 hours.

The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image from iStock, chart from TradingView

The price of Bitcoin (BTC) suffered a significant loss on Friday as prices dipped below $102,000 marking the end of a rather turbulent trading week. As the global financial markets weathered major losses, Bitcoin made no new price discovery, casting more speculations over the bull market.

Critical Price Level Emerges At $98,000 For Bitcoin

Despite an overall positive performance in January, Bitcoin has struggled to confirm the bull run continuation with its all-time high price increasing by merely 0.6%.

As market investors remain confident of more price gains, blockchain analytics firm Glassnode has highlighted a price level that might prove pivotal to Bitcoin’s current bullish setup. In a new post on X, Glassnode shares that market participants have traded a substantial volume of BTC between the price range of $94,000 – $101,000 over the last 45 days.

As a result of this development, there is currently a dense supply cluster forming around the $98,000 price zone indicating a significant amount of investors are acquiring BTC near this price zone. Historically, price areas of high accumulation activity are considered important as they tend to serve as strong support in market downturns and act as resistance during price rallies.

Therefore, if Bitcoin consolidates above $98,000 for an extended period, this price zone could form a sturdy floor, offering support for further rallies in the current bullish structure. However, a fall below this price level could convert it into a strong resistance zone as investors may aim to sell to recoup losses. 

In terms of immediate price movement, if Bitcoin bulls can hold above $98,000 with sufficient buying pressure, the asset could make a return to the $106,000 price region which currently represents a strong psychological resistance zone. On the other hand, if sellers overpower demand at the $98,000 price level, Bitcoin is subject to further decline with a possible retest at $92,000 on the table.

BTC Records Nearly $450 Million In Exchange Outflows

In other developments, the Bitcoin market registered $442 million in exchange outflows over the past week. According to more data from IntoTheBlock, a net outflow of $70 million was reached as exchange inflows stood at $372 million.

Generally, higher exchange outflows than inflows is a bullish development indicating investors are less interested in selling and are moving their assets to private wallets in expectation of a price gain. At press time, BTC trades at $102,269 after a 1.94% decline in the past day. Meanwhile, the asset’s daily trading volume is down by 12.58% and valued at $44.44 billion.

Featured image from Depositphotos, chart from Tradingview 

The Arkansas legislature has rejected a proposed bill that intended to prohibit cryptocurrency mining in close proximity to military installations. The Senate City, County, and Local Affairs Committee of the state denied the measure by a 6-1 vote, thereby halting efforts to impose restrictions on mining operations situated within a 30-mile radius of military sites.

Proposed Ban Addresses Environmental, Security Concerns

The reason for the bill is that having big Bitcoin mining operations near military sites could cause energy problems and raise security issues. The lawmakers who supported the plan pointed to past examples where national security agencies found that foreign-owned mining operations, especially those connected to China, could pose major risks.

The measure raised worries about noise pollution and high energy use, which some critics say could harm local neighborhoods and important services.

Arkansas Maintains Its Crypto-Friendly Position

Arkansas reaffirmed its relatively favorable posture toward cryptocurrency mining by rejecting the bill. Following the Arkansas Data Centers Act’s passage in 2023, the state has been perceived as one of the more hospitable regions for blockchain-based industries.

BTCUSD trading at $102,420 on the 24-hour chart: TradingView.com

By giving Bitcoin miners legal safeguards, this law ensured that they could continue to operate without fear of sudden regulatory crackdowns. By rejecting the proposed mining ban, Arkansas further establishes its position as a pro-crypto state and sets it apart from other areas that are implementing stricter laws pertaining to the digital asset sector.

However, this ruling does not lessen concerns about cryptocurrency mining. This project’s possible national security risks, energy consumption, and environmental effects are still up for discussion. Some lawmakers might support different legislation that seeks to strike a balance between more security and unfettered mining operations.

A rendition of a bitcoin mining facility in Arkansas. Image generated by Gemini Imagen.

Discourse On Regulation Of Bitcoin Mining

The defeat of the Arkansas bill is just one part of a more comprehensive national discussion. In May 2024, the Biden administration did not allow a Chinese-owned mining company to operate near a military base in Wyoming due to national security concerns. President Donald Trump has also stated that the US should focus on Bitcoin mining, saying that the country should lead in the cryptocurrency industry.

Different points of view at the federal and state levels mean that the regulatory environment for crypto mining stays undefined. Arkansas’s ruling indicates, at least for now, the state is not ready to place strong limitations on the sector. But if environmental discussions and security issues get more heated, future legislative conflicts over Bitcoin mining could be just around the bend.

Featured image from Gemini Imagen, chart from TradingView