New on-chain metrics suggest Bitcoin’s recent price strength may be running on thinner liquidity than investors realize.
Bitcoin’s latest rallies are showing an unusual pattern, with some of the strongest price jumps occurring alongside heavy Tether (USDT) withdrawals rather than fresh inflows.
Research from Glassnode indicates a reversal of the typical stablecoin trend, suggesting that recent market gains are being driven more by weaker demand and increased profit-taking than in previous cycles.
Tether Outflows Spike as Bitcoin Climbs
Glassnode notes that during the most euphoric phases of the bull run, traders were pulling $100-$200 million in USDT per day off exchanges, signaling that investors were locking in profits rather than adding new liquidity.
Normally, when Bitcoin rallies, investors move stablecoins onto exchanges to buy more Bitcoin and provide the liquidity that supports price gains.
This cycle, however, looks unusually different. Instead of stablecoins flowing into exchanges to fuel Bitcoin’s rallies, the opposite has occurred. When Bitcoin rises, USDT drains out, creating a strong negative correlation between Bitcoin’s performance and USDT exchange flows.
At Bitcoin’s peak near $126,000, USDT outflows surged beyond $220 million on a 30-day average. This is well above the typical $100-$200 million range seen in prior cycles and suggests that rallies aren’t being fueled by fresh buying, but by profit-taking from existing holders.
Market Structure Shows Signs of Fatigue
Broader on-chain data suggests the market may be approaching a late-cycle stage. Blockchain analytics firm Santiment reports that the number of wallets holding at least 100 Bitcoin has risen by 0.47% since November 11. Meanwhile, smaller wallets, particularly those holding 0.1 BTC or less, have declined.
According to Santiment, this type of retail capitulation often precedes healthier long-term market conditions.
Perpetual futures CVD remains negative, showing the pressure is still coming from aggressive sellers.
Despite recent moves, Bitcoin (BTC) has risen more than 4% in the past 24 hours and is currently trading at $91,400.
Why This Matters
The rising Bitcoin price is occurring amid thinning liquidity. If macro conditions shift or selling accelerates, the market could face sharper drops because there’s less stablecoin support to sustain rallies.
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