USDT activity spikes as traders prepare for market entry

Onchain activity for Tether (CRYPTO:USDT) has reached its highest level in six months, signaling potential market moves by traders.

Data from blockchain analytics platform Santiment revealed that over 143,000 wallets conducted USDT transfers on March 11, coinciding with a four-month low for Bitcoin (CRYPTO:BTC) prices at $76,700.

Santiment noted that increased stablecoin activity during price drops often indicates traders are positioning themselves for buying opportunities.

"When USDT other stablecoin activity spikes during price drops, traders are preparing to buy," the platform stated.

Vincent Liu, chief investment officer at Kronos Research, emphasised that traders frequently accumulate Tether during market dips to deploy capital strategically.

"The uptick in USDT wallet activity likely reflects traders capitalising on recent market volatility," Liu explained.

He attributed this trend to factors such as macroeconomic uncertainties, regulatory developments, and Tether's role as a stable asset.

Despite the rise in USDT activity, broader market recovery remains uncertain.

Liu highlighted that the crypto market's trajectory will depend on macroeconomic conditions, regulatory clarity, and investor sentiment.

The upcoming Federal Open Market Committee (FOMC) meeting on March 18 is expected to play a critical role in shaping market dynamics.

Swyftx lead analyst Pav Hundal pointed out that while some metrics like M2 money supply are trending upward, political and economic volatility continues to suppress market momentum.

"A lot of investors have stopped reacting to the news cycle and are parking cash in Tether," Hundal said.

He described the market as being in a "holding pattern," with capital waiting for favorable conditions.

The Crypto Fear Greed Index also reflects ongoing caution among investors.

Although it has recovered slightly from its February 26 low of 10 ("Extreme Fear"), it remains in the fear zone with a score of 45 as of March 13.

Meanwhile, Tether CEO Paolo Ardoino highlighted the stablecoin's growing adoption as a financial tool for unbanked populations during his U.S. tour.

Ardoino also reiterated Tether's efforts to combat illicit activities by freezing $2.5 billion in suspicious funds and collaborating with law enforcement agencies globally.

At the time of reporting, the Tether (USDT) price was $0.9999.