New Data Highlights Profit-Taking Patterns and Shifting Stablecoin Flows
Blockchain analytics provider Glassnode has identified a “strong negative correlation” between Bitcoin (BTC) activity and USDt (Tether) exchange flows over the past two years. The finding adds a new layer to the ongoing discussion about how stablecoin movement reflects investor sentiment and market cycles.
BTC Rallies Align With USDt Leaving Exchanges
Glassnode’s analysis, published Wednesday, compared Bitcoin’s price to net USDt flows to and from exchanges since December 2023. The data revealed that USDT outflows have consistently aligned with phases of Bitcoin strength, suggesting that investors tend to deploy their stablecoins during bullish conditions and withdraw them during periods of profit-taking.
According to the report, major BTC surges were accompanied by USDt net outflows, indicating that traders were moving funds off exchanges after realizing gains.
Profit-Taking Signaled by Deep USDt Outflows
Glassnode highlighted the relationship clearly:
“During euphoric phases, USDT typically flows out at –$100M to –$200M per day as investors lock in profits.”
At Bitcoin’s $126,000 peak in October, net outflows exceeded $220 million on a 30-day SMA basis, marking one of the strongest profit-taking signals of the cycle.
Since then, those outflows have begun easing, with flows gradually turning positive — a metric often associated with renewed accumulation or liquidity repositioning.
This pattern mirrors an earlier Whale Alert observation from April, which noted that Tether tends to mint new tokens during bull runs and burn supply during corrections, reinforcing the cyclical relationship.
Bitcoin and USDt remain dominant forces in crypto, with market caps of approximately $1.8 trillion for BTC and $184 billion for USDt.
Stablecoin Expansion and Bitcoin Adoption Amid Regulatory Progress
The correlation emerges at a time when the United States is moving closer to establishing an actionable framework for stablecoins. In July, lawmakers passed the GENIUS Act, introducing rules for payment stablecoins operating within the country.
Tether has already pledged compliance and announced the development of USAT, a new stablecoin structured to meet GENIUS requirements.
Alongside regulatory momentum, U.S. policymakers have also shown increasing interest in Bitcoin adoption.
Earlier this year, President Donald Trump signed an executive order calling for the creation of a national digital asset reserve, with a focus on accumulating seized crypto assets — though implementation remains pending.
Glassnode’s analysis underscores the importance of liquidity flows in shaping Bitcoin’s market structure.
The inverse relationship between BTC rallies and USDt exchange flows suggests that stablecoin behavior continues to serve as a reliable barometer for market sentiment, particularly during volatile phases.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.