A surge in Tether’s stablecoin supply injects fresh capital into crypto markets, aligning with past Bitcoin recovery trends.
Bitcoin’s price momentum is improving as stablecoin liquidity surges, with Tether’s (USDT) market cap expanding by $5.75 billion over the past 60 days.
Historically, such inflows have preceded market recoveries, but with Bitcoin still down nearly 30% from its all-time high, analysts remain divided on whether this signals the start of a sustained rally.
CryptoQuant highlighted this trend “historically linked to higher Bitcoin prices” in a March 13 post on X.
He noted that USDT’s growth has surpassed its 60-day simple moving average of $3.46 billion, a key indicator of increasing liquidity in the crypto space.
On-chain data firm Santiment also reported on an X post a surge in Tether’s on-chain activity, with over 143,000 wallets making transfers on March 11, marking a six-month high.
The firm suggested, “When $USDT & other stablecoin activity spikes during price drops, traders prepare to buy.”
Despite these bullish indicators, Bitcoin faces selling pressure from large holders. Santiment data shows that wallets holding between 100 and 1,000 BTC offloaded over 50,600 BTC—roughly $4.07 billion—in the past week.
Historically, such sell-offs have contributed to short-term volatility, raising concerns about whether Bitcoin can sustain upward momentum.
Bitcoin nears oversold zone amid market uncertainty
According to the analysis of the CryptoQuant’s community manager Crypto Dan, Bitcoin’s Market Value to Realized Value (MVRV) ratio has dropped to 1.8, approaching its 2024 low of 1.71. This level has historically signaled buying opportunities.
At the same time, short-term Bitcoin holdings surged to 23% in March, mirroring a pattern seen in December 2024 before a market correction.
While Bitcoin could still dip into the $70,000 range, Dan noted that extensive deleveraging may reduce the need for further declines.
“The market is in the final phase of the upward cycle, experiencing a strong correction, which increases both risk and investment difficulty,” he said. “However, as the market enters an oversold state, the probability of a rebound also increases.”
Despite these indicators, uncertainty remains. While stablecoin growth typically supports Bitcoin rebounds, short-term sentiment remains fragile.
Whale activity, macroeconomic trends, and the strength of any potential recovery will play a crucial role in determining Bitcoin’s next move.
