- USDT dominance faces rejection at MA200, hinting at a bearish trend and potential capital rotation into BTC and altcoins.
- A falling wedge pattern in USDT.D suggests further decline, historically leading to Bitcoin price surges.
- If USDT dominance drops below key support, BTC could see strong bullish momentum, driven by increased market confidence.
USDT dominance (USDT.D) recently faced rejection at the 200-day moving average (MA200) for the second time. This pattern suggests a bearish outlook for stablecoin dominance. Besides, the data indicates a falling wedge, which indicates a bearish move of another kind.
If the trend is sustained, Bitcoin (BTC) and altcoins will not escape the influence of bullish pressure as capital once again flows to cryptocurrencies. In addition, statistics show that the decline in USDT dominance would be followed by an increase in BTC
Source: CryptoBullet
USDT Dominance Signals a Market Shift
The descending wedge pattern in USDT.D presents a clear technical structure. Stablecoin dominance is still under threat, as evidenced by lower highs and lower lows. The prognosis is further supported by the 200-day moving average’s ongoing downward trend. Additionally, price action faced rejection at the upper wedge boundary and MA200, suggesting strong resistance.
Besides, historical cycles show multiple breakout attempts failing at the same level. The latest rejection suggests another wave down toward the wedge’s support zone. If USDT dominance breaks below key levels, BTC and altcoins could gain traction as liquidity shifts into riskier assets. This movement would further validate the inverse correlation between stablecoin dominance and Bitcoin’s price action.
Bitcoin Poised for a Strong Breakout
A declining USDT.D historically leads to Bitcoin’s upward trajectory. According to analyst Merlijn data, Bitcoin surged past $86,000 following a steep drop in stablecoin dominance. Moreover, this market-wide move away from stablecoins and toward crypto assets is shown by the drop. As a result, the ongoing decline in USDT dominance can portend a bullish stage for Bitcoin.
Source: Merlijn
Additionally, USDT.D breaking below crucial support levels suggests increased market confidence in risk-on assets. Bitcoin has shown strong participation levels, with a breakout above key resistance zones. If USDT dominance continues its downward trend, BTC could maintain its bullish momentum.
Moreover, historical patterns align with the current market movement. Every major USDT.D drop in the past has triggered a Bitcoin rally. Hence, the latest market setup suggests that history may repeat itself. Investors are closely watching USDT dominance, anticipating a further decline that could push Bitcoin’s price even higher.
