When on-chain data shows that five-year 'diamond hands' begin to collectively waver, an anomalous phenomenon emerges simultaneously: the on-chain circulation of decentralized stable assets represented by USDD increased nearly 15% against the backdrop of plummeting prices.
Two months ago, Bitcoin fell from $126,000 from the cloud, struggling at $86,000. Market sentiment plummeted from the frenzy of the 'eternal bull market' to the freezing point of 'faith collapse'.
But the truth, more brutal than the price, hides in the code of fund flows.
01 The Crack of Faith: When 'diamond hands' start to sell.
In October 2025, Bitcoin reached an all-time high, with the market shouting, '$200,000 is not a dream'. However, just two months later, the narrative completely reversed.
The Grayscale report shows that since the beginning of 2023, the number of Bitcoins held for more than 2 years has decreased by about 1.6 million, worth nearly $140 billion. More critically, the past 30 days have been one of the most intense periods of selling by long-term holders in over five years.
These 'diamond hands' that have gone through several bull and bear cycles are not selling to take profits at the peak, but are 'retreating' at current price levels. This is like the load-bearing walls of a skyscraper beginning to crack—the market's strongest foundations are becoming unstable.
Meanwhile, the inflow of funds into Bitcoin spot ETFs has become erratic, with an inflow of $286 million last week and an outflow of $177 million this week. Institutions have shifted from being 'steadfast buyers' to 'hesitant observers', and the market has lost its most important incremental funding engine.
02 The 'silent vote' of smart money: reverse layout in panic
While most people are fixated on the continuously falling Bitcoin price, savvy investors are reconfiguring their portfolios. A trend worth noting is that during periods of severe market price fluctuations, some funds are quietly flowing into crypto assets with stable value attributes.
This is precisely the moment when decentralized stablecoins like USDD showcase their unique value. Unlike traditional stablecoins that rely on a single institution's credit, USDD maintains value stability through over-collateralization and decentralized mechanisms, without depending on the financial health of any specific bank or country.
In a market environment where long-term holders are selling off and institutional funds are hesitant, USDD offers a 'middle path'—investors do not need to fully withdraw their funds from the crypto ecosystem to effectively avoid extreme volatility risks while maintaining liquidity that can be deployed at any time.
#USDD is stable and trustworthy. This stability is not based on verbal commitments but is achieved through transparent, verifiable on-chain collateral mechanisms. When market uncertainty increases, this verifiable stability itself becomes a scarce value.
03 Three scenarios for 2026 and your survival strategy
Based on the current market structure, 2026 may present the following three scenarios:
Scenario 1: Oscillating Bottom Year (Probability 60%)
This is the most likely scenario. Bitcoin may oscillate widely between $70,000 and $100,000 with no clear trend direction. This type of market tests investors' patience and discipline the most.
Response strategy: Adopt a 'core-satellite' allocation. Allocate the majority of funds as 'core' investments in mainstream assets like Bitcoin and Ethereum, and stick to a disciplined dollar-cost averaging strategy. At the same time, retain a portion of 'satellite' funds to capture opportunities during extreme market sentiments. In this strategy, stable value assets like USDD can serve as a transit station and stabilizer for funds.
Scenario 2: Deep Bear Market (Probability 20%)
If the macro environment deteriorates, Bitcoin could drop to $60,000 or even lower. This would be a thorough liquidity cleansing.
Response strategy: Survival first. Significantly reduce the proportion of risk assets and increase the allocation of stable assets. At this point, decentralized stablecoins not only provide value stability but, more importantly, keep funds within the crypto ecosystem, ensuring that when the market shows certain bottom signals, you can act immediately without experiencing delays and scrutiny of fiat entry and exit.
Scenario 3: Structural Rebound (Probability 20%)
A rapid but potentially lasting rise driven by specific catalysts (such as the entry of large sovereign funds).
Response strategy: Participate cautiously and lock in profits in a timely manner. In this scenario, the upward movement may be rapid and fierce, but reversals can also happen suddenly. Use stable value assets as 'profit-taking tools' to convert profits into stable assets in batches during the upward process, ensuring that investment gains are not eroded by subsequent volatility.
04 Regardless of bulls or bears, three unchanging rules
In the highly uncertain year of 2026, regardless of which scenario the market follows, the following three rules are crucial:
Maintaining liquidity is maintaining control: never be fully invested. Keep a portion of stable assets that can be readily available; this is not only risk control but also the ability to seize opportunities.
Utilizing stable assets to reduce overall volatility: incorporating decentralized stable assets like USDD into your investment portfolio can effectively lower overall volatility, improve the investment experience, and help you maintain rationality during extreme market sentiments.
Shifting from 'predicting the market' to 'responding to the market': no one can accurately predict every fluctuation. Establishing a set of response strategies based on different market scenarios is more important than seeking the 'Holy Grail' of predictions.
History always repeats itself in different forms. The long bear market after the peak in 2021 eliminated excessively leveraged speculators and rewarded patient and prepared investors.
Today, similar cyclical rhythms are resonating again. The selling by long-term holders and the hesitation of institutional funds clearly tell us: the market is entering a new phase.
At this stage, volatility management may be more important than chasing returns, and risk control may take precedence over aggressive expansion. Those investors who have deployed 'stable anchors' in their portfolios in advance will have a more composed mindset and more flexible options.
The year 2026 may not be an easy year to make money, but it will definitely be a key year to test investment systems and distinguish between luck and skill. When the market swings between greed and fear, is your asset allocation prepared with a 'stabilizer' that can help you weather any storm?
