Recently, USDT dominance has increased by over 5%, which means BTC and other coins have been liquidated in a bearish atmosphere. I am not entirely sure if the crypto market is on the edge of a bearish market yet. However, it seems clear that I can see many warning signs, some of which have already been made public, while others are still under the radar.
Generally, in a bullish cycle when BTC reaches a local top price, USDT dominance shows a 3-4% level. During the last ATH of BTC, it showed around 3.75% dominance.
Since 2024, USDT dominance has been in the range of 3-6%. Before 2024, in the bear market season, the dominance peaked at around 10%.
Stablecoins like USDT and USDC have a very short history in the crypto market, and regulatory discussions are still ongoing. So, it may be too early to make decisions based solely on this dominance index.
I guess the dominance may break out below 3-3.5% when crypto becomes more popular and is used in many sectors like payment, value storage, real-world asset transactions, web3 games, and arts, etc.
USDT dominance clearly moves inversely to BTC's price action. Although there are several other factors influencing this dominance, such as regulatory changes, credibility issues, and other stablecoins' dominance, it is still one of the indicators worth referring to.
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