Author: Helen Partz, CoinTelegraph; Translated by: Bai Shui, Golden Finance
The encrypted financial services platform Matrixport stated that the market capitalization and trading volume of Tether USDT have recently dropped by billions of dollars, but this is not enough to indicate bearish signs in the market.
According to CoinGecko data, Tether's USDT stablecoin market capitalization has dropped 2.8% since peaking at $141 billion on December 19, 2024.
In the past few weeks, USDT trading has also plummeted significantly, with daily trading volume crashing 64% from about $154 billion in mid-December to $55 billion on January 6, 2025.
However, Matrixport stated in a post on X on January 6 that the downward trend of USDT may be a result of the slowdown in holiday trading and should not be related to a bearish shift in the cryptocurrency market.
Matrixport predicts that bullish momentum will soon resume.
In the article, Matrixport mentioned that an increase in stablecoin trading volume is usually a bullish indicator for the cryptocurrency market, reflecting more fiat currency flowing into the ecosystem.
However, when these trends reverse, it usually signals that Bitcoin and the broader cryptocurrency market will enter a consolidation phase, Matrixport reported.
Source: Matrixport
Matrixport wrote: 'Although Tether's market capitalization has recently decreased and trading volume has gradually diminished, it may be too early to be bearish now.'
These trends may just reflect a seasonal lull during the Christmas holidays. With the arrival of the New Year, we will soon see whether the bullish momentum in the market will resume.
Matrixport is not the only company emphasizing the current lack of liquidity during the holidays.
On January 4, CryptoQuant analyst Axel Adler stated that Bitcoin needs to accumulate more trading volume to generate strong bullish momentum, which may emerge as the market recovers from the holidays.
The community fiercely criticized the FUD surrounding Tether and MiCA.
Matrixport's comments on Tether came in response to earlier reports that linked the market drop of USDT to the full implementation of the EU's Regulation on Markets in Crypto-Assets (MiCA).
Although some online reports suggest that European cryptocurrency exchanges should delist Tether's USDT by December 30, 2024, local regulators have not provided such guidance.
The European Securities and Markets Authority (ESMA) is the main supervisory authority for MiCA compliance, and it has repeatedly declined to comment on the status of USDT under MiCA, even after the December 30 deadline.
After Coinbase delisted USDT, trading of USDT continued across Europe, with exchanges like Binance stating that they would continue to support USDT on their platform until further notice by the end of 2024.
Source: Nostradamus
Many community members on X fiercely criticized reports about USDT being delisted from major EU exchanges, calling such reports fear, uncertainty, and doubt (FUD).
An industry observer wrote on X on January 6: 'All the 'news' regarding Tether USDT being delisted from major global cryptocurrency exchanges due to the EU MiCA bill is just FUD.'