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USDT Market Share Rises to All-Time High; what does that mean?

 


The market share of the stablecoin USDT rises to an all-time high! Are crypto investors fleeing USDT to protect themselves from looming volatility?


USDT market share increases to 7.34%

USDT stablecoin market share surges to 7.34%, beating all previous highs. When the crypto market crashed in 2020 and Bitcoin hit around $3,800 and Ethereum fell to around $90, USDT's market share was only around 4.16%. This means that the current market share is around 85% higher than at the time of the biggest crash in the crypto market in the last 5 years.


Is there a negative correlation of USDT market share and Bitcoin price?

Since Bitcoin is primarily traded against USDT, it is only logical that USDT's market share would increase when BTC price falls. After all, Bitcoin is mostly sold for USDT. Therefore, what you can see here is plausible: if the Bitcoin price is at a high point, the USDT market share is at a low point. Conversely, Bitcoin price is at a bottom when USDT market share is at a peak.


However, the phases in which the Bitcoin price rises do not automatically mean that USDT’s market share is falling. Nevertheless, a strong negative correlation can be seen, especially since November 2021.


While the market share of the USDT stablecoin is booming, the Bitcoin price is in free fall.


Bitcoin dominance versus USDT dominance

The USDT dominance behaves differently to the Bitcoin dominance. Because there is no clear correlation here. Nevertheless, the connection can basically be divided into two phases:


Between September and December 2020, BTC's market share increased while USDT's market share shrank. So more BTC was bought with USDT here.


Between May 2021 and June 2021, both Bitcoin and USDT increased in market share. Cryptocurrencies for BTC and USDT were increasingly sold here.


This behavior now appears to be happening again as both BTC dominance and USDT dominance have been increasing since April this year.


A sign that the crypto market is heading into a recession while stablecoins and BTC still remain the top choices as “store-of-value”?


The crypto market could now halve

The crypto market is about to bearishly break the golden ratio at the 50-month EMA at around $1 trillion market cap. The market capitalization of the crypto market could thus shrink to around USD 535 billion, because significant support is only expected for the crypto market between USD 535 and 770 billion.


This would put the crypto market back to a market capitalization that it already reached in 2018.


Bitcoin dominance could rise to 52%

The Bitcoin dominance is very bullish in the monthly chart. The MACD histogram continues to tick bullishly higher and the MACD lines remain bullish crossovers. Bitcoin 's market share could now climb to 52% before it meets resistance.


If the Bitcoin dominance also breaks this resistance, the market share could even rise to around 60%.


USDC stablecoin also climbs to record high

Stablecoin USDC is also climbing to a record high at 5.73%. This puts the combined market share of the two stablecoins USDC and USDT at around 13%. Stablecoins like BUSD are not even included.


However, if the stablecoins do not leave the exchanges and wallets by being converted into FIAT and paid out to bank accounts, that is a very bullish sign.


After all, there is great liquidity ready to buy up certain price ranges of Bitcoin , Ethereum and other cryptocurrencies .


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.


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