Tether (USDT) on-chain activity hits a 6-month high, possibly indicating traders are gearing up to jump back into the market

Data shared by the blockchain data platform Santiment in a March 12 X post shows Tether's (USDT) on-chain activity has been on the rise, peaking with over 143,000 wallets making transfers

Data shared by the blockchain data platform Santiment in a March 12 X post reveals that Tether's (USDT) onchain activity has been steadily rising, culminating in over 143,000 wallets engaging in coin transfers on March 11—the highest count in six months.

Highlighting the implications of this activity, particularly during a period of declining crypto prices, Santiment explained that when stablecoin activity surges during a decline, it indicates traders are preparing to return to the market.

"This provides additional buy pressure, which helps crypto prices to recover from a drop. We saw BTC & ETH attempt to bounce after hitting lows," the blockchain data firm said.

Onchain activity for Tethers USDT has spiked, reaching a sixth-month high. Source: Santiment

According to the data, onchain activity for Tether has shot up in recent days, coinciding with Bitcoin (BTC) dropping to a four-month low of $76,700 on March 11, as the wider crypto market continues to shed more of the gains made post-US election amid macroeconomic uncertainty and an escalating tariff war.

Speaking to Cointelegraph, Vincent Liu, chief investment officer at Kronos Research, said traders often accumulate Tether during dips to position themselves for buying opportunities, adding buy pressure that can help crypto prices recover.

Liu speculates that the uptick in USDT wallet activity may reflect traders capitalizing on recent market volatility.

"Possible causes include broader economic uncertainties, crypto-specific events like regulatory developments or post-election sentiment shifts, and Tether's role as a stable haven, making it an ideal holding for investors preparing to deploy capital strategically," Liu said.

Liu says the surge in USDT activity is a bullish indicator, suggesting significant buying power on the sidelines, but the crypto market's recovery will likely depend on factors like macroeconomic conditions, regulatory clarity, and investor confidence.

"However, with the inflation rate easing to 2.8% in February, lower than expected in recent CPI data, this could reduce pressure on crypto prices and signal a more favorable environment.

"Additionally, the upcoming Federal Open Market Committee (FOMC) on March 18th may provide further indications on interest rates and monetary policy, potentially influencing market development and recovery," Liu added.

A key Bitcoin and crypto sentiment tracker, the Crypto Fear & Greed Index, hit its lowest score in over two years on Feb. 26 as it slipped deeper into “Extreme Fear,” reaching a score of 10.

Crypto sentiment has staged a recovery since, but the index has still registered a score of 45 on March 13, still in fear territory.

Tether CEO Paolo Ardoino is currently on a tour of the US as lawmakers move to regulate the sector.

During a March 12 speech at the Cantor Fitzgerald Global Technology Conference, Ardoino said that as it stands, around 37% of USDT users are using it as a savings account to store value.

"They don't have bank accounts. The only thing that they have in their life is usually cash," Ardoino said.

"Now they finally can hold the most used and most important stable currency in the world, that is the US dollar, but they keep it in their smartphones as their savings account."

At the same time, Ardoino said, Tether is acting as one of the “last strongholds for the US dollar” amid growing concerns that the US dollar could lose dominance as the world’s reserve currency and a go-to for international transactions and commodity trades.

The stablecoin issuer has also been working to curb bad actors in the space, cooperating on more than 170 law enforcement operations and freezing $2.5 billion in illicit funds, according to Ardoino.