USDT market cap share soars to a two-year high, the crypto market may still not have bottomed out

February 2 News, the cryptocurrency market has been weakening for four consecutive months, with the total market capitalization falling back to approximately $2.5 trillion. As prices remain under pressure, investors are beginning to use the Tether market share (USDT.D) indicator to assess whether the market is approaching a bottom. Current data shows that market sentiment remains defensive, and short-term recovery signals are still unclear.

USDT.D measures the proportion of USDT in the total cryptocurrency market capitalization. Historical experience indicates that an increase in this ratio often means funds are shifting from Bitcoin and altcoins into stablecoins, reflecting a decline in risk appetite. TradingView data shows that USDT.D rose to 7.4% on February 2, 2026, reaching a two-year high and breaking through the key resistance level of 6.5%. Meanwhile, the total crypto market cap fell below an important support line, which is viewed as a bearish signal.

Investor Crypto Tony pointed out that while the dominance of USDT is rising, Bitcoin remains in a downtrend and is still far from its historical high range, suggesting the market may not have bottomed out yet. Trader Tim believes that if USDT.D retests 6.5% and continues to rise, the target could be 9.5%. Looking back at 2022, this level appeared around the market’s final bottom, implying that the current environment may still face further adjustments.

On-chain liquidity is also weakening. CryptoQuant data shows that the average amount of stablecoins flowing into exchanges over the past 30 days has significantly decreased. In October last year, the average monthly inflow was about $9.7 billion, but it quickly declined afterward and continued to decrease into early 2026. The outflow of funds indicates that investors are not only shifting into stablecoins but also withdrawing from the market, waiting for clearer directions.

Analyst Darkfost stated that the fund cycle between stablecoins and Bitcoin has noticeably weakened, and long-term liquidity shortages are suppressing price performance. Only when USDT.D declines, stablecoins flow back in, and Bitcoin demand recovers, might the market show more reliable reversal signals. Currently, it appears to be more a test of patience and risk management.