Markus Thelen, an independent analyst, said the decline could be attributed to the Federal Reserve's hawkish pivot in mid-December, which likely dampened investor sentiment. Thelen warned that as conversions from fiat currencies to stablecoins continue to decline, Bitcoin and other cryptocurrencies are expected to continue to consolidate.

Although the quieter holiday period is over, stablecoin flows have yet to show a meaningful recovery. Even after the holiday period, stablecoin inflows have not yet rebounded significantly. Thelen stressed that this metric is important, as a rise in stablecoin mintage “usually indicates higher demand for cryptocurrencies.” However, he admitted that the current rise in mintage is slight, and its sustainability remains uncertain.

Thielen remains cautious, noting that while any increase in mintage is a good sign, it is still not enough to signal a clear path for bitcoin or other cryptocurrencies. For now, the market will likely remain in a holding pattern until more significant movements in stablecoin flows emerge.

Meanwhile, US Bitcoin exchange-traded funds recorded their third straight day of outflows this year, with Bitcoin falling below $90,000 amid broader risk-off sentiment in the market. Such as crypto.news I mentioned12-point Bitcoin exchange-traded funds recorded nearly $285 million in net outflows on January 13, extending the outflow streak to three days, during which more than $1 billion exited the funds.