February 11 News, as the largest stablecoin by market capitalization, USDT has recently shown rare signals. Its market cap growth, after two consecutive years of expansion, has turned negative for the first time, sparking market concerns about a weakening mid-term trend. Multiple on-chain indicators show that changes in stablecoin supply are becoming a key reference for measuring risk appetite and liquidity in the crypto market.
Data indicates that the 60-day moving average of USDT market cap, as tracked by CryptoQuant, turned negative in February. The last time similar was observed was in Q3 2023. Historical charts suggest that when USDT supply continues to grow, new liquidity often flows into crypto assets; when growth slows or turns negative, it indicates funds are more likely to be withdrawing from the market rather than waiting for a rebound. Analyst Crypto Tice pointed out that a contraction in purchasing power weakens downside support, making short-term rebounds more susceptible to selling pressure.
Looking at specific data, CoinGecko shows that USDT market cap has fallen from approximately $187 billion in early January to $184.3 billion. This change is related to recent large-scale token burns by Tether. On February 10, Whale Alert disclosed that Tether burned $3.5 billion worth of USDT in a single transaction, and last month, another $3 billion was burned. CryptoQuant considers these to be the two largest consecutive burn events in history, reflecting rising demand from investors to convert stablecoins back into fiat currency.
Investor Ted stated that since Q1 2025, USDT supply has entered a decline phase for the first time, which is not a positive short-term signal. However, historical cycles offer some reference: since 2022, periods when the 60-day average market cap change was negative typically lasted about two months and often coincided with Bitcoin consolidations or phase bottoms, such as at the end of 2022 and in the second half of 2023.
Therefore, the current trend may indicate that the market is hovering at lows or continuing to face pressure over the next two months before seeking recovery. Some analysts believe that if the key support level of $63,000 for Bitcoin is broken, it could face a deeper correction. The fluctuations in USDT market cap are becoming an important indicator for observing the mid-term direction of the crypto market.
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