Is USDT now cheaper than the US dollar? This could be the most crucial signal of the entire cycle.

Let’s look at the numbers: USDT is now at 6.95, while the USD exchange rate is 7.06. That’s a 1.5% difference. Don’t assume it’s a data glitch—this is a real price gap, and the market is telling you something through actual trades.

**Who’s selling?**

Many people’s first reaction: retail investors are panicking. Wrong. Retail volume isn’t enough to cause a systemic 1.5% discount.

The real sellers are OTC merchants. These “smart money” players, who’ve been arbitraging for years in the OTC market, would rather lose 1.5% now to swap USDT for fiat. They’re not stupid—when the pros start avoiding risk and hoarding cash, it means liquidity is drying up. This is called a Liquidity Drain—literally, money is being pulled out of the system.

**History doesn’t repeat, but it rhymes**

I checked data from the past few years and found a hard rule:

- Before May 19, 2021, USDT had a huge premium over the dollar, and then? The market crashed.
- During the regulatory crackdown in September 2021, the discount dropped to -3%, and BTC shot up from $40,000 to $69,000 within a month.
- After the FTX collapse in November 2022, the negative premium stayed between -1% and -2% for a long time—that was the absolute bottom of the last bear market.

See the pattern? Premium = peak FOMO, discount = despair-driven sell-off. This current -1.5% is the blood-on-the-streets price.

**Where are we now?**

My take: we’re at the tipping point between despair and accumulation.

The panic selling by OTC merchants is helping the market flush out the last batch of shaky hands. To momentum traders it looks scary, but for true hunters, this is an easy 1.5% arbitrage opportunity—plus a discounted ticket to the next bull market.

Don’t focus on how the candlesticks look. Watch where the money is flowing.