CryptoQuant: USDT Supply Reduction Reaches Historically Extreme Levels

cryptonews.ruPublished on 2026-08-05Last updated on 2026-08-05

Abstract

CryptoQuant analysts report that the supply of the USDT stablecoin has sharply contracted, nearing historically extreme levels, and that this reduction in liquidity is a key factor hindering Bitcoin's recovery. The market capitalization of USDT has fallen to $183 billion, its lowest since October 2025. Its 60-day change is approximately -$4 billion, approaching record lows, with supply shrinking nearly $870 million in just the last 11 days. This signals an acceleration in liquidity outflow. Analysts note there is no direct causal link between USDT flows and Bitcoin's price; both are reacting to the same risk-off environment where investors reduce risky positions. Historically, however, periods of expanding USDT supply have coincided with Bitcoin rallies, while contractions have been associated with weaker demand, deeper corrections, and poor market liquidity. The current aggressive shrinkage of this major liquidity pool is preventing price bounces from turning into a sustained recovery. For market conditions to improve, CryptoQuant states that the 60-day change in USDT's market cap must stabilize, its daily supply reduction must slow, and the stablecoin must return to growth. The firm also observes that past periods of the deepest USDT supply contractions have often coincided with seller exhaustion rather than intensifying pressure, suggesting the market may be nearing a point where recovery conditions could gradually improve, though no signs of new capital inflow are curr...

CryptoQuant analysts have reported a sharp reduction in the supply of the stablecoin $USDT, which, they say, has approached historically extreme values. In their view, the decline in liquidity is one of the key factors restraining Bitcoin's recovery.

$USDT Liquidity Shrinks Sharply

The market capitalization of $USDT has fallen to $183 billion, its lowest level since October 2025.

Analysts noted that the 60-day change in the stablecoin's market cap is approximately -$4 billion, nearing its lowest levels on record.

Furthermore, in just the last 11 days, the supply of $USDT has decreased by nearly $870 million, which, according to experts, indicates an acceleration of liquidity outflow rather than just a residual effect from previous buybacks.

CryptoQuant emphasized that stablecoins remain the primary source of liquidity in the crypto market, so their reduction directly impacts market conditions.

Analysts Explain Bitcoin's Weakness

Experts stressed that there is no direct causal link between $USDT flows and Bitcoin's price action. In their opinion, both metrics are reacting to the same risk-off conditions, where investors are reducing risky positions.

At the same time, they recalled that historically, periods of expanding $USDT supply have often coincided with phases of Bitcoin growth, while its reduction has been accompanied by weaker demand, deeper corrections, and deteriorating market liquidity.

According to the analysts, the current decline in the first cryptocurrency is occurring against the backdrop of an aggressive reduction in one of the market's largest liquidity bases, which is why price bounces have so far been unable to turn into a sustainable recovery.

$USDT market capitalization and Bitcoin price. Infographic: Incrypted.

CryptoQuant believes that an improvement in the market situation will require stabilization of the 60-day change in $USDT's market capitalization, a slowdown in the daily supply reduction, and a return to growth for the stablecoin.

At the same time, analysts pointed out that historically, periods of the deepest reduction in $USDT supply have often coincided with stages of seller pressure exhaustion rather than its further intensification. This may indicate the market is approaching a point beyond which conditions for recovery gradually improve, although they currently do not observe signs of new capital inflow, the company summarized.

Earlier, Tether published its financial results for the second quarter of 2026.

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