Bitcoin has shown a strong negative correlation with USDT exchange flows over the past two years, according to a new analysis published by blockchain analytics firm Glassnode. The firm compared Bitcoin’s price movements with net inflows and outflows of Tether’s USDT since December 2023, finding that withdrawals of the stablecoin from exchanges have consistently aligned with major Bitcoin price increases.
In a post shared on X on Wednesday, Glassnode said that during highly optimistic phases of the market, USDT typically leaves exchanges at a rate of 100 to 200 million dollars per day. The firm added that outflows reached more than 220 million dollars on a 30-day moving-average basis when Bitcoin hit its 126,000 dollar peak in October. Analysts described this pattern as a clear signal that traders were locking in profits during the rally.
Market behaviour and stablecoin dynamics
USDT and Bitcoin remain two of the largest digital assets by market capitalisation, with Bitcoin around 1.8 trillion dollars and USDT near 184 billion dollars. As one of the most widely used stablecoins, USDT often acts as a liquidity source during market volatility and a preferred instrument for traders seeking to rotate into or out of crypto positions.
Earlier research by Whale Alert in April also identified a correlation between Bitcoin price cycles and USDT supply management. According to that analysis, Tether tends to mint new tokens during bullish periods, while burning supply during downturns. The Glassnode findings align with this view, indicating that stablecoin flows continue to provide insight into trader sentiment and market positioning.
For European readers, the relationship between Bitcoin and USDT is also significant in the context of the EU’s ongoing regulatory shift under MiCA, which introduces stricter oversight for stablecoins used in the single market. As regulators tighten controls around issuance and reserves, analysts say Europe may see stronger distinctions between speculative crypto flows and regulated digital payment tokens over the coming years.
As flows turn positive again, Glassnode notes that profit-taking pressures appear to be easing. Market analysts will now be watching whether renewed inflows of USDT to exchanges signal a new accumulation phase or whether volatility persists as Bitcoin remains near record highs.