When Bitcoin fluctuates sharply:  

1. **Stablecoin Demand**: Volatility spikes often boost demand for USDT/USDC as traders seek safety or hedging.  
2. **Market Cap Swings**: BTC drops may temporarily increase stablecoin supply (liquidation proceeds), while rallies drain it (conversion into BTC/alts).  
3. **Depeg Risks**: Extreme sell-offs can pressure USDC (heavily backed by cash) if redemptions surge, while USDT’s opaque reserves face scrutiny.  
4. **CEX Flows**: Exchanges see stablecoin inflows during downturns (buy-the-dip preparation) and outflows during rallies.  
5. **DeFi Activity**: Stablecoin lending/borrowing rates surge as traders reposition.  

USDT usually dominates liquidity, but USDC gains traction in regulated markets during uncertainty.