Tether (USDT), the leading stablecoin, is witnessing fluctuations concurrent with the rise of Bitcoin (BTC) and other cryptocurrencies. Bitcoin’s value surged to $43,500 at the start of the week, driven by investor optimism ahead of the Federal Reserve meeting. This optimism is also reflected in the growing supply of USDT on exchanges, hinting at a potential influx of capital into the crypto market.
Santiment, an on-chain data provider, has observed a contrasting trend between cryptocurrencies like Bitcoin and Ethereum (ETH) and USDT. While the former are being withdrawn from exchanges, USDT has seen a 4% increase in its exchange supply over five weeks, with 30% of its total supply now on exchanges.
The increased presence of USDT on exchanges is interpreted as a signal of heightened purchasing power in the crypto market. Analysts believe this could support the continuation of the bullish cycle that began in October 2023, which has persisted for over three months.
The current market conditions, coupled with the anticipated Bitcoin block reward halving event in April, are fueling speculation that the bullish trend may intensify. Market supply changes are being closely watched to predict upcoming trends.
Following the Spot Bitcoin ETF approval, Bitcoin experienced a sell-off down to $38,500 before recovering, suggesting a potential end to the market correction. Crypto analyst Michael van de Poppe predicts a consolidation phase for Bitcoin, with a possible rise to the $48,000 to $50,000 range, which could also pave the way for altcoins to thrive.