The CryptoQuant analytical platform has published a detailed report on the current state of the stablecoin market. Researchers have recorded a noticeable reduction in the total supply of the popular USDT stablecoin. The market capitalization of this digital asset has dropped by about four billion dollars. This decline has occurred over the past sixty days and has become one of the sharpest. The rate of reduction continues to steadily increase against the background of changing investor behavior. In the last eleven days alone, the supply volume has decreased by eight hundred and seventy million. Such dynamics indicates an actively developing trend of funds outflow from the market. Stablecoins remain a key source of liquid funds for the entire digital asset industry. The massive return of USDT to the issuer in exchange for dollars reduces the total volume of circulation. Reducing the supply of stablecoins actually means the gradual withdrawal of money from the cryptocurrency market.

Analysts explained in detail the connection between the drop in the capitalization of the stablecoin and the decline in the price of bitcoin. Historically, periods of steady growth in the supply of USDT have coincided with a steady strengthening of the bitcoin exchange rate. Prolonged phases of contraction were usually accompanied by weakening demand and a deeper price correction. Weak attempts at a rebound in the price of bitcoin are explained precisely by the lack of stablecoin liquidity. The lack of available funds prevents market participants from forming a steady demand for spot. However, the most serious declines in USDT volume in the past often coincided with important reversals. Such extreme values often indicated the imminent exhaustion of selling pressure. The current situation may be a good sign before the start of a new phase of the bullish cycle. To get out of this pit, a stable recovery of the stablecoin capitalization is necessary. Experts expect the start of a steady increase in the supply of USDT over the next two months.

Representatives of the British company Wintermute also see signs of the end of a protracted bearish phase. Large cryptocurrencies have been able to maintain relative stability amid recent economic turmoil. Experts drew attention to the preservation of the base interest rate on loans in the United States. The digital asset market has demonstrated high resilience to such macroeconomic factors. The limited decline in quotations indicates a gradual weakening of the dominant bearish trend. The additional pressure from active sellers looks almost completely exhausted. Market participants carefully study the reports on network activity published by independent researchers. The analysis of on-chain metrics helps to better understand the behavior of various groups of network holders. Large corporate players consistently adapt their own strategies to the current market conditions. Researchers continue to publish detailed reviews of network activity for a wide audience.

***

The material has been prepared solely for informational purposes and does not constitute financial advice or recommendation.