USDT Capitalization Explains Why Bitcoin Price Isn't Rising More, Says Analyst

• USDT capitalization reaches its lowest level since October 2025.
• In the last 11 days, $870 million in USDT supply has exited the market.

The money supply of the stablecoin Tether USD (USDT) is experiencing one of the most extreme contractions. Over a span of 60 days, the asset's capitalization fell by $4 billion, bringing its supply down to $183 billion, the lowest level recorded since October 2025.

The speed of this decline reflects that the market deterioration has accelerated suddenly. Over the last 11 days, $870 million in USDT supply has disappeared, as highlighted by Ignacio Moreno de Vicente, an analyst at CryptoQuant.

This data is important because USDT (and other stablecoins) represent liquidity in the Bitcoin (BTC) and cryptocurrency market. They function as cash ready to buy BTC or as a safe haven during periods of high volatility.

Regarding the fragility of Bitcoin's price recoveries, Moreno de Vicente explained that this helps to explain why rebounds have struggled to gain durability: there is less liquidity in stablecoins available below the price to convert into sustained cash demand.

When analyzing the cause-and-effect relationship between financial flows and market pricing, the specialist clarified that the caution lies in the fact that the correlation between USDT flows and BTC price does not establish causality. Both likely respond to the same risk-averse conditions, with redemptions accelerating alongside spot selling rather than strictly preceding it.

Historically, periods of expansion in USDT supply have accompanied prolonged bullish cycles in Bitcoin. In contrast, phases of persistent reduction tend to go hand in hand with deep corrections and widespread weakening in commercial transactions in the sector, he notes.

On the macro environment, the analyst emphasized that it is developing while one of the largest liquidity bases in the market is contracting aggressively.

However, the historical metric also offers a nuance about the behavior of these liquidity cycles. As Moreno de Vicente pointed out, historically, the deepest phases of USDT contraction in the market have also marked points where selling pressure was closer to exhaustion than acceleration.

Regarding the metrics needed to reverse the current downward trend, the specialist concluded that a significant improvement would require the 60-day change to stabilize, daily contractions to moderate, and USDT supply to begin expanding again. Until then, Bitcoin is trying to recover in an increasingly tight liquidity environment rather than facing a new influx of capital.

However, the explanation focused exclusively on speculative trading seems to fall short of the current reality of the ecosystem. As liquidity on exchanges decreases, stablecoins are expanding their presence into economic sectors that were marginal just a few years ago, as reported by CriptoNoticias.

During the early years of the sector, these assets functioned almost solely as temporary investment havens between trading operations. Today, they drive areas such as international payments, savings products, asset tokenization, remittances, and even automated operations executed by artificial intelligence. Monitoring this operational transition is vital to anticipate where the true financial flow will migrate in the coming months.