The cryptocurrency market is showing signs of potential stress as two key liquidity indicators—Tether's market capitalization and large Bitcoin inflows to exchanges—flash warning signals. For the first time in two years, the 60-day average growth rate of USDT's market cap has turned negative, according to CryptoQuant data. This shift occurred in February, with the last similar instance recorded in Q3 2023.
USDT's market cap has declined from over $187 billion in early January to approximately $184.3 billion, as per CoinGecko. This contraction is partly attributed to significant burn activity by Tether. On February 10, Whale Alert reported a burn of 3.5 billion USDT, following a 3 billion USDT burn in January. CryptoQuant statistics indicate these are the two largest consecutive burns in history, reflecting investors redeeming USDT for fiat currency.
Analyst Crypto Tice emphasized the implications, stating, "Historically, sustained upside in $BTC doesn't happen when stablecoin supply is contracting." He noted that contracting supply weakens buying power, makes downside support fragile, and leads to rallies being sold off more quickly.
Concurrently, whale inflows to Binance have accelerated sharply. On February 8, whale deposits exceeded 1,970 BTC, a substantial increase compared to prior spikes of around 400 BTC in October, November, and December 2025. Those earlier spikes coincided with a local market top near $124,000 in mid-October.
Further data from the Whale Screener model detected significant BTC inflows to spot exchanges on February 4, 5, and 7, with daily deposits ranging between $650 million and $850 million. This pattern, combined with the reduction in USDT liquidity, suggests large entities may be preparing to reduce exposure rather than accumulate.
Historical context offers a mixed outlook. Since 2022, periods when the 60-day average USDT Market Cap Change turned negative typically lasted around two months and often coincided with Bitcoin moving sideways to form a local bottom. However, BeInCrypto's analysis outlines a bearish scenario where Bitcoin could fall below $43,000 if the key $63,000 support level breaks.
