The cryptocurrency market is showing signs of declining liquidity: participants are simultaneously withdrawing USDT from exchanges while making large Ethereum deposits to centralized platforms. Such flow combinations are often seen as negative signals because stablecoin outflows weaken buying power, and large ETH inflows may precede sell-offs.
Signs of Declining Liquidity in the Cryptocurrency Market
Data on USDT transfers over the TRON network indicate a notable decrease in balances on major exchanges, reducing available liquidity for spot trading. On Binance, from December 10 to 25, Tether volume decreased by approximately $1.2 billion — net outflows moving from around $6.4 billion to $7.6 billion — signaling liquidity withdrawal and weakened buying capacity.
Similar trends are observed on other platforms: between October 17 and December 25, USDT balance on Bybit fell by about $1.196 billion — from roughly $700 million to a negative $496 million. Such consecutive outflows are typically viewed by market participants as pressure factors on prices and increased volatility.
Ethereum Inflows to Exchanges and Their Impact
Alongside USDT outflows, ETH inflows to major centralized exchanges have increased, indicating a rise in coins being sent to trading venues. Expert Amr Taa noted that on December 12, Kraken received approximately $398 million in ETH, after which Ethereum’s price dropped from around $3,200 to below $2,900.
Later, on December 23, Kraken recorded an additional ETH inflow of about $580 million, and on December 24, Binance received ETH deposits totaling roughly $425 million. Combined over 48 hours, ETH inflows to Kraken and Binance approached $1.4 billion, intensifying market concerns about potential continued selling pressure.
Analysis of USDT Reserve Dynamics
USDT remains a primary liquidity source for the spot market, so monitoring exchange reserves is crucial for assessing buying power. The reduction in balances on Binance and Bybit, reflected in TRC20 transfer data, signals a decrease in available funds for purchases and a potential increase in asset selling under adverse conditions.
In such circumstances, market participants often respond with heightened volatility: together with large ETH inflows, this shifts the supply-demand balance on exchanges and amplifies downward pressure on prices.
Expert Opinion and Context
Reports and commentary from analysts highlight the combination of stablecoin outflows and large Ethereum deposits as a classic warning sign for spot market liquidity. Specific figures on deposits and outflows help more accurately gauge the scale of the phenomenon and the exchange price reaction.
To correlate these flows with institutional behavior and stablecoin operations, it’s useful to review materials on the impact of large stablecoin conversions and institutional investments: stablecoin conversion and institutional investments provide insight into the accompanying picture of outflows and inflows.
Why This Matters
For miners, declining liquidity in the spot market means prices become more sensitive to large orders and potentially more volatile when realizing revenue. Meanwhile, USDT outflows reduce market buying power, and large ETH inflows to exchanges may signal readiness to sell, ultimately pressuring asset prices.
Even if you don’t actively trade assets, such flows affect exchange rates and spot prices, which impact revenue from selling mined ETH and overall mining profitability in ruble terms.
What to Do?
- Review your selling thresholds: during increased volatility, it’s advisable to set more flexible rules for transferring coins to exchanges and selling.
- Diversify risks: where possible, spread withdrawals across multiple platforms and use several wallets/exchanges to reduce the impact of localized liquidity shortages.
- Monitor exchange reserves and large deposits: timely information on ETH inflows and USDT outflows helps choose optimal moments for conversion or delayed selling.
- Consider transfer costs and confirmation times: during high activity periods, fees and settlement times may vary, so plan transactions in advance.