Tether’s USDT Echoes 2022 Signal, Raising Questions for Bitcoin

Bitcoin slipped below $65,000 during early Asian trading hours as renewed tariff tensions weighed on broader risk sentiment. As the largest cryptocurrency extends its downtrend, Tether’s USDT has flashed a signal that has appeared only once before: the 60-day market cap change dropped below -$3 billion.

In a recent post, analyst Moreno noted that this threshold was breached in late 2022, when Bitcoin was bottoming near $16,000. Stablecoins serve as the market’s “dry powder.” Moreno wrote that expanding USDT supply generally reflects new capital entering exchanges and risk assets, while contraction indicates forced redemptions, risk-off behavior, or investors moving funds out of the system.

Over a 60-day window, a multibillion-dollar contraction signals sustained liquidity withdrawal rather than a short-term fluctuation. He also highlighted three single-day USDT outflows that exceeded $1 billion, episodes that have clustered around periods of intense volatility or local market bottoms.

bitcoin, tether, usdt, stablecoins, market cap, 60-day change, supply contraction, liquidity withdrawal, exchange flows, outflows