Tether's USDT Flashes Bear Market Signal, Bitcoin Price Takes a Hit

Tether's (USDT) 60-day market cap change has dropped below -$3 billion, echoing a similar trend seen during the late 2022 bear market. This significant contraction in USDT supply is causing concern among investors, with some analysts warning of further downside pressure for Bitcoin.

Stablecoins like USDT serve as a crucial component of the crypto ecosystem, often reflecting new capital entering exchanges and risk assets when their supply expands. Conversely, a contraction in supply can indicate forced redemptions or liquidity withdrawal, which can have far-reaching consequences for cryptocurrency markets.

According to CryptoQuant data, USDT's market cap change has dropped below -$3 billion only once before – during the late 2022 bear market when Bitcoin was bottoming near $16,000. This trend is being closely watched by investors as it may signal a major turning point in the cryptocurrency market.

Analyst Moreno notes that a sustained contraction in USDT supply can have significant implications for Bitcoin's price and overall market sentiment. While some analysts predict further downside pressure, others suggest that the cycle bottom could still be months away, with projections ranging from October 2026 to November 2026.