The Bitcoin Dry Powder Myth Busted: Exits – Not Buyers

Bitcoin’s stablecoin supply ratio has fallen to 9.36, a level often considered marginal purchasing power ready for deployment.

Bitcoin’s stablecoin supply ratio (SSR) has fallen to 9.36, a level historically associated with significant pending purchasing power, but on-chain data shows this metric sends a false signal.

According to analyst Axel Adler Jr., the decline is due to the departure of capital from the ecosystem rather than the accumulation of stablecoins, which fundamentally changes the way investors interpret this classic bullish indicator.

Liquidity drain, no dry powder

SSR measures Bitcoin’s market capitalization relative to the total stablecoin supply, with lower values ​​traditionally suggesting sufficient stablecoin liquidity available to purchase BTC. However, current conditions tell a different story.

In a February 25 submission, Adler highlighted that USDT capitalization peaked at $187.2 billion on December 30, 2025 and has since contracted to $183.6 billion, a 60-day outflow of $3.6 billion. Additionally, the 30-day change has remained negative for 34 consecutive days, now sitting at -$3.08 billion.

This is important because the mathematical decline of the RSS arises from the simultaneous weakening of both components. Bitcoin’s market capitalization fell by around 27% during this period, while the supply of stablecoins also contracted.

“Technically, the SSR is falling mathematically because the market cap of BTC has collapsed, but the simultaneous contraction of USDT deprives this signal of any upside potential,” Adler explained.

The estimated leverage ratio confirms structural weakness, remaining stable around 0.219 across all exchanges for 90 days despite Bitcoin’s sharp correction. This plateau indicates that speculative capital is not adding new risks, but, more importantly, is not removing old risks either, creating the potential for cascading liquidations in the event of further declines.

Aged offer, absent buyers

Bitcoin’s recent price action reflects the fragility described above, with the asset briefly falling below $63,000 on February 24 before returning to current levels around $65,400. This price represents a drop of more than 25% over the last 30 days and almost 27% over one year.

You might also like:

Recently released HODL Waves data also revealed a defensive market structure under price action. Coins last moved 3-6 months ago now make up about 26% of the circulating supply, up from 19% earlier this month.

These correspond to purchases near the November 2025 peak, above $120,000, now held at a loss. Meanwhile, the 6-12 month cohort has grown to around 20%, while coins moved in the past month represent less than 10% of the supply.

In addition, the change in net cap position achieved confirms the exit of capital from the network, standing at -2.26% over 30 days with a value compression of $33 billion since the end of November.

The distinction between the decline of SSR by outflow or by accumulation has real implications. According to Adler, for a true trend reversal, two things need to happen at the same time: the 30-day USDT moving back into sustainable positive territory (confirming new capital inflows) and the ELR starting to rise during price stabilization. In the meantime, the analyst claims that Bitcoin’s low SSR does not represent an opportunity, but the mathematical residue of the departure of capital.