Recently, there’s been a strange phenomenon in the market: the price of USDT keeps dropping, while major coins like Bitcoin are going up. What’s really going on here?

Let’s start with why USDT’s price is falling. The core reason is that withdrawal channels have been blocked. When BTC rises to a certain level, many people want to cash out. The normal process should be: sell coins for USDT, then convert USDT to fiat through C2C. But now the problem is with the second step—the path from USDT to fiat is almost completely blocked. After regulatory tightening, the risks in C2C channels have surged, and many people are stuck holding USDT that they can’t cash out.

As a result, a large amount of “want to sell but can’t exit” USDT is piling up in the market. Supply surges, demand shrinks, and the price naturally collapses. At this point, USDT is like a transit station with no exit—the more it piles up, the heavier the selling pressure gets.

So why are coin prices still rising? The logic is actually simple: funds are locked inside the system. Those who wanted to sell coins for USDT and cash out realize they can’t exchange their USDT for money, and can only watch as their USDT devalues. So some people start to do the opposite—if they can’t exit, they might as well reinvest their USDT back into the crypto market, buying BTC or other coins. This “forced to stay” capital actually pushes coin prices higher.

To put it bluntly, this is a liquidity dilemma: with the exit blocked, funds can only circulate internally. USDT’s price drops because there are no buyers; coin prices rise because money can’t leave and can only keep buying coins. How long can this situation last? That depends on when the withdrawal channels return to normal liquidity.