Bitcoin’s “Dry‑Powder” Narrative Crumbles: Outflows, Not New Buyers, Drive Decline in Stablecoin Supply Ratio
By Crypto News Desk – February 26 2026
Overview
The Bitcoin Stablecoin Supply Ratio (SSR)—the quotient of Bitcoin’s market capitalization divided by the total supply of stablecoins—has slipped to 9.36, a level traditionally interpreted as a surplus of “dry‑powder” ready to be deployed into BTC. New on‑chain analysis, however, shows the metric is being pulled down by capital exiting the ecosystem rather than by fresh inflows of stablecoins.
Analyst Axel Adler Jr. argues that the declining SSR is mainly a mathematical artifact of a shrinking Bitcoin market cap coinciding with a contraction in USDT supply, making the usual bullish signal misleading.
What the Numbers Say
| Metric | Current Value | Recent Trend |
|---|---|---|
| SSR | 9.36 | Down from higher levels observed earlier in the year |
| USDT market cap | $183.6 bn | Fell $3.6 bn (≈ 1.9 %) since Dec 30 2025 |
| 30‑day USDT change | –$3.08 bn | Negative for 34 straight days |
| Bitcoin market cap | 27 % lower than Dec 2025 peak | Drives SSR decline |
| Estimated Leverage Ratio (ELR) | ~0.219 (flat for 90 days) | No new speculative leverage added |
| Realized Cap Net Position Change | –2.26 % (30 days) | $33 bn of value compressed since late Nov 2025 |
| HODL‑Wave age composition | 26 % of supply > 3–6 months, 20 % > 6–12 months, <10 % < 1 month | Indicates a market dominated by older, loss‑making cohorts |
Source: on‑chain data compiled by Axel Adler Jr., CryptoPotato analysis.
The Mechanics Behind the Drop
The SSR falls when either Bitcoin’s market cap shrinks, stablecoin supply expands, or a combination of both changes. In the current environment:
- Bitcoin’s market cap has contracted sharply (≈ 27 % loss), eroding the numerator of the ratio.
- USDT supply has also contracted, losing $3.6 bn over the past two months. This decrease in the denominator offsets the usual interpretation that a lower SSR signals abundant buying power.
Adler explains that “the SSR’s downward movement is primarily a result of Bitcoin’s price correction, while the simultaneous USDT outflow strips the ratio of any bullish connotation.”
The Estimated Leverage Ratio (ELR) staying flat at roughly 0.219 suggests that while speculative capital is not adding new risk, it also isn’t being unwound. The combination of a stagnant ELR and declining SSR creates a scenario where further price declines could trigger liquidations, rather than attracting fresh buying pressure.
Market Behaviour
Bitcoin’s price briefly dipped below $63,000 on 24 February before rebounding to around $65,400. Over the last 30 days the price is down more than 25 %, and a 12‑month view shows a near‑27 % decline from the November 2025 peak of $120,000.
The HODL‑Wave analysis illustrates that a growing share of Bitcoin’s circulating supply belongs to cohorts that bought during the 2025 rally and are now holding at a loss. Coins moved within the past month represent less than one‑tenth of total supply, underscoring a lack of short‑term turnover.
What Would Signal a Real Reversal?
According to Adler, two conditions must align before the SSR can be considered a genuine buying‑signal again:
- Positive 30‑day USDT flow – sustained inflows indicating fresh liquidity entering the stablecoin pool.
- Rising ELR – an uptick in leveraged positions that typically accompanies a stabilising or rising Bitcoin price.
Absent these, the low SSR is best viewed as a “mathematical residue” of capital outflows, not an indicator of untapped demand.
Key Takeaways
- SSR decline is driven by outflows, not by new stablecoin accumulation, making the metric misleading as a bullish indicator.
- USDT supply fell by $3.6 bn over the past 60 days, with a 34‑day streak of negative 30‑day change.
- Bitcoin’s market cap fell ~27 %, the primary driver of the SSR reduction.
- Estimated Leverage Ratio remains flat, suggesting no fresh speculative risk but also no unwinding of existing leverage.
- HODL‑Wave data shows an aging supply, with a larger proportion of coins held from the 2025 peak now at a loss.
- A genuine bullish reversal will require both a turnaround in USDT inflows and a rise in the ELR.
Until those benchmarks are met, investors should treat the low SSR as a sign of capital withdrawal rather than an opportunity for cheap buying.
The analysis draws on on‑chain metrics and commentary from analyst Axel Adler Jr., compiled by CryptoPotato. All figures are accurate as of 26 February 2026.
Source: https://cryptopotato.com/bitcoins-dry-powder-myth-busted-outflows-not-buyers-driving-low-ssr/
