USDT Dominance Poised for Historic Drop Below Key Moving Average

Bullish chart showing USDT and BTC logos

USDT dominance could close below its 200-week moving average for the first time ever, potentially signaling a shift in power from stablecoins to riskier assets like Bitcoin.

Unless something crazy happens in the next 40 minutes then USDT dominance will close its first weekly candle below the 200 week moving average. This is massive folks #Crypto #BTC

— Yomi (@OG_Yomi) February 18, 2024

The cryptocurrency market is on the cusp of a potentially significant event, with USDT dominance nearing a crucial technical level. Unless unforeseen circumstances arise within the next 40 minutes, USDT’s weekly candle is likely to close below the 200-week moving average for the first time ever. This development carries significant implications for the market, potentially indicating a shift in power dynamics between Tether and other cryptocurrencies, particularly Bitcoin.

What is USDT dominance?

USDT dominance refers to the percentage of the total cryptocurrency market capitalization that is held by Tether (USDT), a stablecoin pegged to the US dollar. A high USDT dominance indicates that investors are seeking shelter in stablecoins, potentially due to fear or uncertainty in the market. Conversely, a declining dominance suggests investors are moving into riskier assets like Bitcoin and other altcoins.

USDT dominance chart

USDT dominance refers to the proportion of the total cryptocurrency market capitalization represented by Tether (USDT), which is a type of stablecoin pegged to the US dollar. It is calculated by dividing the market capitalization of Tether (USDT) by the total market capitalization of all cryptocurrencies.

USDT dominance is often used as a metric to gauge the influence and stability of Tether within the cryptocurrency market. When USDT dominance is high, it indicates that a significant portion of the cryptocurrency market is represented by Tether, suggesting that traders and investors are using USDT as a preferred medium for trading and storing value. Conversely, when USDT dominance is low, it suggests that other cryptocurrencies or stablecoins may be more prevalent in the market.

Monitoring USDT dominance can provide insights into market sentiment, liquidity, and the overall health of the cryptocurrency ecosystem. However, it’s essential to consider other factors such as trading volume, market trends, and regulatory developments when analyzing the significance of USDT dominance.

Significance of the 200-week moving average:

The 200-week moving average is a widely used technical indicator that represents the long-term trend of an asset’s price. Closing below this key level can signal a potential trend reversal, indicating a shift in investor sentiment. This can be seen from the chart below:

usdt dominance

Implications for the market:

If USDT dominance closes below the 200-week moving average, it could be interpreted as a sign that investors are losing faith in stablecoins and becoming more comfortable with riskier assets. This could lead to increased buying pressure for Bitcoin and other cryptocurrencies, potentially boosting their prices.

Author: Jinka

Jinka is a self-trained crypto journalist, passionate about happenings in the industry.

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