USDT Stablecoin Activity Reaches 6-month High
Onchain activity for Tether has reached a six-month high, potentially signaling that traders are preparing to re-enter the market, according to analysts.
Blockchain data platform Santiment reported in a March 12 post on X that Tether’s onchain activity has been increasing, with more than 143,000 wallets making transfers on March 11, marking the highest level in six months.
“When USDT & other stablecoin activity spikes during price drops, traders are preparing to buy. Added buy pressure aids in crypto prices recovering,” Santiment stated.
The spike in activity coincides with Bitcoin dropping to a four-month low of $76,700 on March 11, as the broader crypto market continued losing gains made after the US election, impacted by macroeconomic uncertainty and escalating tariff tensions.
Speaking to Cointelegraph, Vincent Liu, chief investment officer at Kronos Research, noted that traders frequently accumulate Tether during market downturns to position themselves for future buying opportunities, which in turn creates upward pressure on crypto prices.
He suggested that the recent surge in USDT wallet activity is likely a response to market volatility.
“Possible causes include broader economic uncertainties, crypto-specific events like regulatory developments or post-election sentiment shifts, and Tether’s role as a stable haven, making it an ideal holding for investors preparing to deploy capital strategically,” Liu said.
He believes the rise in USDT activity is a bullish signal, reflecting significant buying power waiting on the sidelines.
However, he added that the market’s recovery will depend on factors such as macroeconomic conditions, regulatory developments, investor confidence, and the upcoming Federal Open Market Committee (FOMC) meeting on March 18.
Swyftx lead analyst Pav Hundal told Cointelegraph that several key market indicators, including M2 money supply, are trending upwards, but he does not expect a major price rebound until political and economic volatility subsides.
“Inflation metrics this week out of China and the US are helpful — but as long as this trade war kicks on, we should expect the market to lack conviction,” he said.
He also noted that many investors have stopped reacting to daily news cycles and are instead parking their funds in Tether.
“The market is basically in a holding pattern, with more and more cash circling over the market waiting for a landing slot.”
While Hundal described the current market conditions as "ugly," he pointed out that USDT dominance has returned to October levels, a time that preceded a pre-Christmas rally when Bitcoin hit $100,000 for the first time.
The Crypto Fear & Greed Index, a key measure of Bitcoin and crypto sentiment, fell to its lowest level in over two years on Feb. 26, slipping further into “Extreme Fear” with a score of 10.
Sentiment has improved since then, but as of March 13, the index remains in fear territory, recording a score of 45.
Meanwhile, Tether CEO Paolo Ardoino is currently touring the US as lawmakers move toward regulating the crypto sector.
Speaking at the Cantor Fitzgerald Global Technology Conference on March 12, he noted that 37% of USDT users are using it as a savings account.
“They don’t have bank accounts. The only thing that they have in their life is usually cash,” Ardoino said.
“Now they finally can hold the most used and most important stable currency in the world, that is the US dollar, but they keep it in their smartphones as their savings account.”
At the same time, Ardoino emphasized that Tether is acting as one of the ‘last strongholds’ for the US dollar, amid concerns that the dollar’s global dominance in international transactions and commodity trades could be weakening.
Additionally, Tether has been ramping up efforts to combat illicit activity, working on more than 170 law enforcement operations and freezing $2.5 billion in illicit funds, according to Ardoino.
Sources:
https://x.com/santimentfeed/status/1899903453557920067/photo/1
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