USDT Triggers Rare Signal Last Seen at 2022 Bitcoin Bottom, but Rebound May Be Slower

Prashant Jha

Mon, February 23, 2026 at 8:47 PM GMT+9 4 min read

In this article:

BTC-USD

-2.60%

USDT-USD

-0.00%

Key Takeaways

USDT supply has plunged sharply, triggering a rare signal only seen at the 2022 Bitcoin bottom, when fear peaked after FTX collapsed.

Back then, heavy USDT redemptions marked the cycle low, followed by a powerful multi-year rebound as selling exhaustion set in.

Today, Bitcoin sits far higher after a strong bull run, suggesting any rebound may be slower, choppier, or require additional downside first.

Tether’s USDT stablecoin is flashing a market signal not seen since Bitcoin (BTC) hit rock bottom in late 2022.

The sharp drop in USDT supply, reminiscent of the panic following the FTX collapse, signals potential market turbulence—but history may not repeat exactly this time.

The rare contraction has traders watching closely, as it often coincides with major market turning points.

Yet today’s crypto ecosystem is far larger, more mature, and dominated by institutional players, suggesting any rebound could be slower, choppier, and less predictable.

USDT Supply Shrinks to FTX-Crisis Levels

According to CryptoQuant, the 60-day change in USDT’s total supply has plummeted to a negative $3 billion—the second time in history.

Market observers are watching closely, noting that such redemptions historically come from large institutions or whales exiting the crypto system, rather than simple coin swaps.

“Think of USDT as the ‘cash’ everyone holds while waiting to buy or sell other coins,” the report explains. “When new USDT is minted, fresh money pours in; when redeemed, money leaves.”

Bloomberg reports that USDT is on track for its largest monthly decline since December 2022, having already fallen by roughly $1.5 billion in February 2026.

Daily outflows have surged, with three consecutive days seeing more than $1 billion removed from circulation in a 24-hour period.

USDT contraction falls to the level last seen in 2022. Credit: CryptoQuant.

Echoes of 2022: How the Last Signal Sparked a Rebound

The FTX collapse in late 2022 triggered a market-wide sell-off.

Confidence in cryptocurrencies was shaken, and stablecoins like USDT came under scrutiny.

During that period, the 60-day USDT variation fell below -$3 billion, Bitcoin tumbled to around $16,000, and forced liquidations swept across exchanges.

Once selling pressure eased, USDT flows stabilized, and capital began re-entering the market.

Bitcoin climbed steadily in 2023, surged through 2024, and hit unprecedented highs by 2025.

Analysts point out that the pattern—a dramatic USDT contraction followed by a strong recovery—has repeated across previous cycles.

“Extreme liquidity stress has historically marked opportunity, but only once selling exhaustion is confirmed,” said CryptoQuant analyst Ignacio Moreno.

Story Continues  

Why the Current Drop is Different

Today’s USDT contraction mirrors the 2022 signal visually but differs fundamentally.

Bitcoin is currently trading between $65,000 and $70,000, down nearly 45% from its all-time high of $126,000 set in 2025.

This decline comes after a period of uninterrupted USDT growth through early 2025, indicating that the recent shrinkage is more of a post-bull-run correction than a market capitulation.

“Extreme liquidity stress has historically marked opportunity, but only once selling exhaustion is confirmed,” said CryptoQuant analyst Ignacio Moreno.

If USDT outflows continue, Bitcoin and altcoins may face additional downside before a true bottom forms.

Conversely, if flows stabilize or reverse soon, the market could pivot quickly—similar to the 2022–2023 rebound.

Unlike 2022, when panic drove Bitcoin to $16,000, today’s elevated prices mean many holders remain in profit, creating potential volatility on any bounce.

The market’s larger size and increased institutional presence suggest reactions could be slower and choppier.

USDT Metrics: A Must Watch

Market watchers are monitoring USDT redemptions closely.

Key indicators include daily flow trends, exchange inflows and outflows, and broader liquidity in stablecoins like USDC.

Analysts caution that while the signal is historically significant, the scale and maturity of today’s market could produce a different trajectory.

The Takeaway

The signal is real, rare, and historically significant.

Large USDT stress often precedes market rebounds, but traders should recognize this isn’t 2022’s despair-driven bottom.

It’s a correction following a strong run.

How the market responds in the coming weeks will determine whether history repeats or charts a new path.

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The post USDT Triggers Rare Signal Last Seen at 2022 Bitcoin Bottom, but Rebound May Be Slower appeared first on ccn.com.

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