USDT Demand Stalls in January, Signaling Capital Outflows from the Market

The market has not seen issuers mint billions of {dollars} in stablecoins each day in latest months. In January 2026, stablecoin development confirmed clear indicators of slowing. This sign raises questions on what the market could also be dealing with subsequent.

By evaluating stablecoin developments with Bitcoin worth actions and comparable historic durations, a number of potential eventualities emerge. These comparisons assist traders achieve a extra complete view of attainable dangers forward.

USDT Market Capitalization Stalls, Raising Concerns About Continued Correction

Data from the USDT Market Cap Change by CryptoQuant tracks each day adjustments in the market capitalization of the main stablecoin.

The 60-day common (60-day market cap change – SMA30) reveals that the tempo of USDT market cap development has declined sharply since late November final yr. Growth fell from round $15 billion to roughly $3.3 billion.

When in contrast facet by facet with Bitcoin’s worth, a powerful correlation turns into obvious. In earlier cycles, rising liquidity—mirrored by speedy will increase in USDT market cap—typically moved in parallel with Bitcoin rallies.

Conversely, when liquidity development slowed, Bitcoin usually entered a interval of stagnation. In worse eventualities, the market shifted right into a downtrend.

Although the 60-day market cap change – SMA30 has not but turned adverse, the newest indicators from the 2026 market setting are sending warnings.

First, the market capitalization of USDT (ERC-20)—which accounts for more than 50% of the whole USDT provide—has declined over the previous month. At the identical time, USDT has traded constantly under $1 throughout this era.

This doesn’t point out a USDT depeg. However, a declining market cap, mixed with sub-$1 pricing, displays capital outflows. Stablecoin holders seem much less in searching for new alternatives and extra inclined to money out.

Second, Tether Treasury just lately burned 3 billion USDT. This marked the first burn since May final yr. CryptoQuant knowledge reveals this was additionally the largest USDT burn in the previous three years.

Some observers interpret this transfer as an indication of warning from giant gamers amid macroeconomic uncertainty and rising geopolitical tensions. This course of usually happens when traders redeem USDT for USD, prompting Tether to take away the corresponding USDT from circulation.

“Someone huge simply utterly exited the market,” investor Ted commented.

These indicators stay early and aren’t but robust sufficient to substantiate a definitive development. However, in the event that they intensify, the stablecoin market’s two-month stagnation at around $308 billion in whole capitalization might finish and shift right into a corrective part.

In that situation, Bitcoin and altcoins might face an increased risk of entering a bear market—an end result most traders would like to keep away from.

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