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Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead

Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead

CoinspeakerCoinspeaker2025/02/20 16:00
By:By Bhushan Akolkar Edited by Julia Sakovich

The rising supply of stablecoins like USDT and USDC signals potential bullish sentiment, with analysts viewing them as “dry powder” for altcoins rally ahead.

Key Notes

  • Recent inflows, including the largest USDT deposits have raised speculation about renewed market interest from major players.
  • CryptoQuant CEO Ki Young Ju declared the start of an altcoin season, noting stablecoin holders are favoring altcoins over Bitcoin.
  • Altcoin trading volumes now exceed Bitcoin's by 2.7 times.

The stablecoin supply for top players like Tether’s USDT USDT $1.00 24h volatility: 0.0% Market cap: $142.23 B Vol. 24h: $61.67 B and Circle’s USDC USDC $1.00 24h volatility: 0.0% Market cap: $56.20 B Vol. 24h: $7.55 B has been on the rise recently hitting new record highs. Market analysts are turning optimistic that big market players could turn bullish soon which could lead to an altcoin market rally moving ahead.

Crypto market analysts like Miles Deutscher attribute this trend to stablecoins acting as “dry powder”, ready to re-enter the cryptocurrency market when the right catalyst emerges. Despite the bearish conditions, the growing stablecoin reserves signal potential for renewed activity across the digital asset space. Deutscher said: “Now it just needs a spark” to reignite momentum in the market.

Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead image 0

Source. rwa.xyz

Ever since the deleveraging earlier this month, the cryptocurrency market witnessed the largest inflow of Tether (USDT) to exchanges, as per Deutscher. This surge in the stablecoin deposits has sparked speculation regarding renewed interest from major market players.

Market analysts suggest that the move could signal preparation for increased trading activity as well as strategic positioning ahead of potential market shifts. The inflows have caught the attention of investors, as stablecoin movements often precede significant market developments.

Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead image 1

Source: CryptoQuant

Will Stablecoin Strength Trigger Altcoin Rally Ahead?

Ki Young Ju, the CEO of crypto analytics platform CryptoQuant, announced the beginning of an altcoin season highlighting significant shifts in the market behavior. “Alt season has begun,” Ju stated, while stressing that there’s been a direct rotation from Bitcoin to altcoins. Instead, stablecoin holders are increasingly favoring altcoins, as reflected in trading volume trends.

As of now, the altcoin trading volume is 2.7 times that of Bitcoin BTC $99 267 24h volatility: 1.9% Market cap: $1.96 T Vol. 24h: $32.58 B . Ju also explained that there’s a shift in how alt seasons are defined stating that “BTC dominance no longer defines alt season — trading volume does”.

Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead image 2

Source: CryptoQuant

Ju is not alone in being bullish on altcoins despite the current underperformance. Prominent crypto analyst Rekt Capital has highlighted a potential trend reversal in the altcoin market. Following a period of capitulation below the $220 billion mark, the total altcoin market cap has stabilized around the $250 billion level, attempting to establish a solid base.

Furthermore, Rekt Capital also noted early indicators of a double bottom pattern formation on the daily timeframe.  “A daily close and subsequent retest above the black resistance level would confirm this pattern, signaling a potential trend reversal to the upside,” the analyst stated.

Strong Stablecoin USDT Supply Hints at Altcoins Rally Ahead image 3

Source: Rekt Capital

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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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