Bitcoin shows strong negative link to USDT activity, study finds

According to blockchain analytics firm Glassnode, there is a strong negative correlation between Bitcoin price and USDT stablecoin flows. The two-year study compared the price of BTC with net inflows of USDT to exchanges from December 2023. Based on the survey, net outflows of USDT correlated with the price increase in BTC. 

According to the Glassnode report, during bull runs, USDT outflows increased across the exchanges, ranging from $100 million to $200 million per day. The report noted that the net flows in USDT were primarily due to profit-taking activities. During the October bull run when BTC hit its all-time high above $126,000, the net USDT outflow reached $220 million. 

Glassnode says Tether mints USDT during bull markets  

Glassnode’s study noted that Whale Alert’s April 2025 analysis echoed the fact that Tether mints USDT during cryptocurrency bull markets and burns tokens during market corrections. The trends underscored the role of stablecoins as liquidity tools. So far, USDT and BTC remain the top digital assets by market capitalization valued at approximately $1.8 trillion and $184 billion, respectively. 

Revisiting this cycle’s USDT netflow to exchanges, we find a strong negative correlation with BTC’s mid-term performance.
During euphoric phases, USDT typically flows out at –$100M to –$200M/day as investors lock in profits.
At the $126K peak, net outflows reached >$220M… pic.twitter.com/AOsHf8dQ2p

— glassnode (@glassnode) November 26, 2025

Research from Glassnode further reinforced the trend, noting that as the Bitcoin price approaches peak points, USDT inflows to exchanges tend to decline. According to the study, the trend indicated that investors were moving stablecoins off exchanges to preserve their gains. 

Following the July 2025 passage of the GENIUS Act, the U.S. government established a favorable regulatory framework for stablecoins across the country. Paolo Ardoino, Tether’s CEO, confirmed the launch of USAT, a GENIUS Act-compliant stablecoin designed for the U.S. market to support institutional adoption while complying with the GENIUS Act. 

President Donald Trump also signed an executive order in March directing the creation of a digital asset reserve. The bill sought to hold seized cryptocurrencies, but it has not yet been fully implemented.

The report highlighted the net outflows in November across the spot Bitcoin ETFs, where institutional investors accounted for a significant portion of the outflows. Approximately $3.55 billion in net ETF outflows has been recorded in November so far, based on on-chain data. The institutional takeover has highlighted a shift in investment patterns from retail investors, who previously dominated the crypto market, to large institutions. According to the Glassnode report, tracking Bitcoin and USDT movements provides a key insight into the behaviors of both retail and institutional investors, revealing patterns that impact liquidity, pricing, and market volatility. 

BTC recovers to $90,000 levels 

Glassnode noted that the integration of stablecoins into institutional portfolios has a significant impact on Bitcoin price movements, with price dynamics poised to continue growing further. The uncovered correlation between BTC price movements and USDT flows revealed that when profit-taking trends are in place, coupled with institutional adoption, they influence how liquidity flows impact price movements. 

According to Glassnode, the identified pattern provides investors with a lens into market trends, enabling them to interpret signals from stablecoin activities as they navigate the crypto ecosystem. The study noted that monitoring trends is crucial for maintaining investor sentiment and confidence across the digital asset landscape. 

Bitcoin has recovered from levels below $90,000, trading at approximately $90,970 at the time of publication, representing a 3.89% increase over the past 24 hours. The Fear and Greed Index has also improved from a low of 15, currently standing at 18 points, showing renewed confidence across the crypto ecosystem. 

USDT stablecoin remains at the top by market capitalization followed by USDC, with a market cap of $184.4 billion and $75.4 billion, respectively, based on current on-chain data. USDT supply is concentrated mainly on the Ethereum network, with 47.6% of the supply and the Tron network, with 41% of the supply. 

Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program