USDT Market Cap Plunges $4 Billion Amid Bitcoin Selling Pressure Nears Exhaustion

Tether's USDT market capitalization has declined by approximately $4 billion over the past two months, signaling that Bitcoin selling pressure may be nearing exhaustion.

CryptoQuant notes that this decline is one of the steepest contraction periods on record, with a 30-day simple moving average tracking the 60-day change in USDT market capitalization standing at negative $4.88 billion as of August 10.

The recent drop in USDT supply has been attributed to tighter liquidity in the crypto market, making it difficult for new demand for digital assets, including Bitcoin, to emerge.

CryptoQuant also points out that past episodes have shown that sharp contractions in USDT supply tend to coincide with the later stages of market downturns and are closer to the exhaustion of selling pressure rather than further acceleration in selloffs.