Tether inflow into exchanges in last month has taken place in the volume of $450 million lighting the discussion around the possible impact of growing stablecoin liquidity on Bitcoin (BTC).

In the past Bitcoin followed USDT supply patterns closely so investors see if new funds will boost buying power enough to propel Bitcoin above $100,000. In mid-December BTC achieved its highest price ever at $108,000 during the moment when USDT supply hit its maximum level of 140 billion.

Market participants changed their attitude toward digital currencies which caused BTC to drop back to $91,000. The market showed increased investor hedging by reducing USDT supply by $3 billion which dropped to 137 billion at the same time.

Tether Inflows Surge: What It Means for Bitcoin’s Next Move

Bitcoin’s Struggle at $100K Sparks Increased Leverage

The circulating supply of USDT has hit its largest amount ever with 141 billion tokens while new investors continue moving money onto exchanges. According to analysts the cryptocurrency market will see higher buying interest when identified rotating capital turns into spot trading activity.

The market could experience a liquidity trap if people leverage their funds instead of directly buying assets because the price surge would collapse when overleveraged investors must unload their positions.

Several investors added more leverage after BTC tried to reach $100,000. The Estimated Leverage Ratio mark has kept growing in an upward direction for extended periods.

Spot market exchanges show more Bitcoin flowing in than flowing out because investors want to sell less than they buy at this time. When prices drop in the market a high level of leveraged trades could initiate a series of forced sell-offs.

Tether Inflows Surge: What It Means for Bitcoin’s Next Move

Can Stablecoin Inflows Support Bitcoin’s Price Growth?

The ongoing entry of stablecoin funds creates market uncertainty for Bitcoin”s near-future movement. Major market players fear investing in Bitcoin due to substantial unrealized profits and weak purchasing from BTC ETF investors.

The BTC market lacks substantial buyer purchases to withstand selling activity which makes its short-term trend unpredictable. Investors should exercise caution when trading during this unstable market situation.

When Bitcoin receives new funds from stablecoins both its price and trading performance typically see upgrades yet leveraged traders and weak buying volume leave BTC susceptible to extreme downwards price drops. Market watchers need to track leverage use and liquidity shifts across the next few weeks to forecast where Bitcoin prices will go.