The largest stablecoin in the cryptocurrency, Tether (USDT), recently lost its $1 peg. Here are some facts that on-chain data reveals about this event.

In the past couple of days, USDT became decoupled from its $1 peg as the stablecoin’s value plunged to $0.996. Since then, however, the asset has seen some recovery, although the $1 peg is yet to be regained as Tether still trends under $0.999.

While this isn’t the first time that the largest stablecoin by market cap has observed destabilization, it’s natural that this depegging event has still led to the emergence of fresh FUD in the market.

In a new post, the on-chain analytics firm Santiment has looked at how this USDT drop has reflected on the on-chain side of things. The first metric that’s of relevance here is the “trading volume,” which is simply a measure of the total amount of Tether that investors are shifting on the blockchain currently.

Here is a chart that shows how this metric’s value has changed recently:

As displayed in the above graph, the Tether transaction volume shot up to a 3-month high of $10 billion during this event, meaning that investors were moving around a large amount of the asset on the chain.

Another metric, called circulation, measures the unique number of tokens that are being moved. From the below chart, it’s visible that this indicator has also rapidly risen to a high of 2.39 billion.

Interestingly, this trend would suggest that each of these Tether tokens would have been moved an average of approximately five times during the depegging, implying that the constant movements of the same investors may have been behind a big part of the extraordinary trading volume.

As one may expect, there looks to have been a lot of panic selling in the market during the plunge, as the data of the network realized profit/loss, a metric that tells us about whether investors are selling/moving their coins at a profit or at a loss, would suggest:

From the chart, it’s visible that the indicator’s value has observed a highly negative spike recently, implying that investors have been moving their coins at a loss. It would appear that many holders got scared very quickly and ditched the stablecoin as soon as they saw it dip.

“All of this said, traders will want to keep a close eye on this Tether story,” says Santiment. “Oftentimes, one depegging of a highly popular stablecoin is followed by a series of future ones. Especially when the topic of solvency begins to come into the picture.”

At the time of writing, Tether is trading around $0.998, down 0.1% in the past week.

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