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Tether (USDT) has recently experienced sustained capital inflows, with the stablecoin hitting historic market cap levels. While such a trend is historically positive for the crypto market, analysis suggests that this momentum may not be ideal for Bitcoin (BTC). Specifically, USDT dominance has been rising, a factor that could signal a possible reversal in Bitcoin’s price, which is attempting to breach the $70,000 spot and possibly target a new all-time high, according to an analysis by Alan Santana shared in a TradingView post on October 26. USDT market dominace chart. Source: TradingView It is worth noting that Tether’s dominance highlights the market share of USDT among all cryptocurrencies. The metric is a barometer for market sentiment and liquidity flow between stablecoins and other assets like Bitcoin. Santana noted that from early 2024 to March, the stablecoin’s dominance steadily declined, forming a rounded bottom that hinted at a potential end to the bearish phase. Following this, USDT entered an ascending channel, consistently finding support at the lower boundary and sparking bullish moves within the channel. What USDT dominance means for Bitcoin  The analyst observed that bullish rebounds in USDT dominance often coincide with downward pressure on Bitcoin, while declines typically lead to Bitcoin rallies.  For example, between September 6 and October 21, Tether’s decline aligned with a strong Bitcoin upswing.  Rising USDT dominance suggests more investors are holding stablecoins, signaling caution or hedging against volatility, often preceding downward moves in Bitcoin. Stablecoins are widely considered a bridge to entering the crypto space, with USDT ranking among the notable coins due to its substantial $120 billion market cap. In this context, some market players argue that capital inflow into stablecoins indicates investors’ anticipation of a potential market rally. Tether’s legal controversy  Amid this capital inflow in USDT, the market remains in a…

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Filed under: News - @ October 26, 2024 12:19 pm