USDT market cap growth signals potential Bitcoin price recovery
Bitcoin’s price outlook is improving as stablecoin liquidity surges, with USDT market cap expanding by $5.75 billion in the past 60 days.
According to CryptoQuant’s Mar. 13 post on X, this increase surpasses its 60-day simple moving average of $3.46 billion. The stablecoin market has also exploded, rising 11% from $203.9 billion to $226.1 billion in the same time frame.
Such stablecoin inflows have historically signaled the entry of new liquidity in the cryptocurrency market, frequently paving the way for Bitcoin (BTC) price rebounds.
Santiment’s data also revealed a six-month high in Tether’s (USDT) on-chain activity, with over 143,000 wallets making transfers on Mar. 11 alone. Santiment argues that because previous stablecoin spikes during market downturns have preceded recoveries, this trend signals that traders might be positioning for a possible market turnaround.
Many analysts believe that increasing liquidity may help a market-wide recovery, even though Bitcoin’s short-term price action is still volatile. Bitcoin remains under pressure after falling almost 30% from its $109,000 all-time in January, trading at $81,712 at the time of press.
According to a Mar. 12 market analysis by CryptoQuant, Bitcoin might be approaching the oversold territory, which has historically preceded price recoveries.
In March, the share of Bitcoin held for less than a month rose to 23%, similar to a spike in December 2024. Both times, Bitcoin’s price corrected afterward, bringing the Market Value to Realized Value ratio down to 1.8, close to its 2024 low of 1.71.
The MVRV ratio helps gauge whether Bitcoin is overvalued or undervalued by comparing its market price to the average purchase price of all coins. If Bitcoin falls to the $70,000 range, the ratio could align with previous cycle lows, potentially signaling a price rebound.
Market sentiment, however, remains fragile. Large Bitcoin holders, or wallets holding 100 to 1,000 BTC, have sold off more than 50,600 BTC in the last week, according to Santiment. This represents a sell-off of about $4.07 billion.
On the brighter side, the number of Bitcoin holders is still close to its all-time high of 54.72 million, indicating that the network is still growing despite these pressures. Bitcoin’s ability to withstand selling pressure while benefitting from growing liquidity and past recovery trends will determine the market’s next course.
