CryptoQuant: Bitcoin sell pressure near exhaustion

CryptoQuant reported that Bitcoin selling pressure is nearing exhaustion after Tether’s USDT declined by about $4 billion in market capitalization over a two-month period, with roughly $870 million of supply disappearing in an 11-day span.

In a blog post published last week, the onchain analytics firm put the 30-day simple moving average of the 60-day USDT market-cap change at minus $4.88 billion as of Aug. 10. The firm noted the steepest 60-day contraction peaked on July 13 at minus $5.72 billion.

CryptoQuant described the decline as one of the sharpest on record and wrote that the recent $870 million outflow in 11 days indicates the contraction is not solely a legacy effect from earlier redemptions.

The firm reported that periods of sustained USDT expansion historically coincided with stronger Bitcoin price regimes, while prolonged contractions tended to align with weaker demand, deeper corrections and deteriorating market conditions.

CryptoQuant added that the largest USDT drawdowns often occurred in late stages of broader market downturns and that such contractions have marked moments when selling pressure was closer to exhaustion than to further acceleration.

The analysts cautioned that correlation between USDT flows and Bitcoin price does not establish causation, noting both metrics typically move during the same risk-off conditions and that redemptions can accelerate alongside spot selling rather than strictly causing it.

Independent analyst William Clemente wrote that the Bitcoin network remains ‘fundamentally healthy’ and called Bitcoin ‘cheap’, while warning a further downward leg remains possible this year. He highlighted a developing bullish divergence between Bitcoin’s price and the weekly relative strength index, a pattern that preceded the 2022 market reversal.

Tether’s USDT is the largest stablecoin by market capitalization and is a common trading pair and settlement asset on exchanges. Changes in its circulating supply can reflect investor redemptions or new issuance tied to trading demand, affecting the amount of capital available to buy assets during price dips.

CryptoQuant’s figures and the technical indicators cited by analysts provide data points for traders assessing liquidity and market risk; the firm did not offer price forecasts.