The Fear Trade Broke in June. SimpleSwap’s Analysts on What to Watch Instead

In February, we saw Bitcoin falling 17.5% over 36 hours, and stablecoin inflows on our platform ran 600% above their weekly average in a single day. But in early June, although the Bitcoin price dropped 15.7% over 70 hours, within the two percentage points of the same depth, stablecoin inflows came in 9% below average.

So, during the first quarter, the correlation between weekly net stablecoin flow and Bitcoin’s level was -0.54. But through the second, the correlation reads +0.18. The trend is completely opposite, which means the relationship has not weakened; it has stopped existing. 

Novelty. While the first drawdown of the cycle is news that people react to, the third one is the weather. People now realize that they don’t need to rearrange their portfolio because it is raining again.

Because different technical instruments are showing the same curve. During the February crash, the Fear and Greed Index read 5, the lowest reading in history. In June, the index was in the low teens, but the drawdown depth was similar to the February one. We also talked to other aggregators to inspect their own books. On Swapswap, the inflows were 61% above baseline in February. In June, they fell to 9.3% below baseline, with their correlation moving from -0.33 to +0.04.

Swapzone confirms that the metric was working in February, when it registered stablecoin swaps rising 50% above normal. But the same trend did not replicate in June when the total swap volume remained above the baseline. We could see a surge in both venues, but only one was able to confirm the fade.

The best way to look at this indicator is to treat it as a half-life. While it looks clean during the first shock of a cycle, it fades after each time it repeats at the same depth. One practical approach is to respond according to the size of the decline, and not the previous response.

If stablecoin inflows are appearing in month five and you are seeing no action, don’t take it as evidence of calm. We have observed that the Fear & Greed Index spent roughly two of every three days of the half in Extreme Fear. So what we saw in June was a muted reaction inside a frightened market, and not a relaxed one.

Both are correct because they are measuring different things. Dominance is like a stock figure that shows where the value is. It appears the same to the user who has not touched their BTC for three years and the one who has just traded it this morning. But someone who has been aggregating Bitcoin only notices something is different when another one decides to leave it.

Take our combined Bitcoin and ETH share for instance. It fell 5.2 points to 43.4% over the half, with Bitcoin’s net balance coming out slightly negative at -1.2 points.

To understand it practically, when you see a dominance chart showing an increasing trendline while the data is showing the money rotating out, you are seeing that the patient ones are waiting, and the active traders are moving. On its own, dominance will show you that the majors are winning. But it won’t show you that people who are transacting spent half the assets into dollars.

The money went to USDT on the TRON network, causing the net balance to jump by 6.0 points, and was the largest single gainer according to the report. As a group, dollar-pegged assets saw 27.1% of sent volume and 36.3% of received volume. Monero recorded the sharpest outflow at -6.2 points.

They are rails. Through the half, the total stablecoin circulations stayed at $310 billion. However, the amount being transferred experienced a dramatic increase, with Visa’s Allium-powered dashboard logging $1.79 trillion in adjusted transfer volume in June, which is an all-time high and 125% higher than the previous year. 

So stablecoins stopped growing and transaction volume started to increase. The same number of stablecoins are now being used more. 

The transaction data we saw in the report shows this change. Across 26 weeks, we only saw two instances of outflows from stablecoins. One of them was in February, when BTC went through its biggest drawdown. If stablecoins were really a parking space for investors during volatile times, this behavior would be different. What the market now shows is that stablecoins are acting more as a corridor through which the capital moves, regardless of whether or not the market is under pressure.

We admit that the trading volume saw a 33.9% drop as compared to the second half of 2025. However, transactions during the same period fell only 18.9%. It shows that the number of traders is likely the same, but the amount they are trading is less. Look at the standard median swap: it dropped 17%, which is close to 18.9% in the average transaction size. As both measures are dropping at the same rate, we can say that the dip in the volume is not because the biggest traders left. If they had, the average swap would have dropped much below the median.

Not even remotely. This figure only shows the volume on our platform. It does not tell the state of the entire market. During the February peak, for instance, 50% of Solana’s decentralized trading activity happened on one launchpad; it did not indicate how the entire meme coin market was behaving. So the figure that our platform shows does not dictate the state of the meme market as a whole.

But there is even deeper data to draw from here. Meme coins were being traded fewer times on our platform, and these trades were small too. While they made up for 1.1% of total trading volume on the platform, they were also 1.4% of all transactions, meaning the average meme coin trade was 79% of the average trade overall.

Just because a token is available early does not mean users’ demand for it would come early. We have recorded that the fastest an asset generates interest among people after being listed is 101 hours. But typically, it can take 48 days. That is an 11x difference between fastest and median cases. Every token gains attention at a different time. 

No one, including us, picks which side a token will fall on, in advance. That’s the reason we have kept listing roughly ten a week.

Focus on the reach rather than the number of assets. Most of the transactions on SimpleSwap involve more than one network. In this half, 71.4% of transactions reached a network outside the four largest chains, which is more than twice the reach of Ethereum. Large chains determine how big the swap size is, and a broader network coverage decides whether a swap can even happen. Those who are comparing venues based on how many assets are on the platform are focusing on the wrong metric.

We are watching whether the fear response goes back to how it was. Another drawdown in the future of a similar depth as before will either confirm whether people continue to move away from their fear-led behavior or whether it starts to come back.  We will publish whatever happens in reality, and will not guess what could happen in advance.