At the time of writing, USDT is nearing a key support level, which it has tested twice since July. If USDT dominance boosts, a correction could occur, indicating market panic as sellers take profits before the rally wanes.
Tracking USDT dominance is crucial for investors as it can signal the end of the current bullish cycle if it diverges from the prevailing downtrend. One major driver of this liquidity has been the declining dominance of Tether (USDT), a sign that capital may be moving away from stablecoins and into Bitcoin.
A bearish MACD crossover on the same day also confirmed this trend. Another historic milestone highlighted the growing significance of USDT and USDC, further deepening their impact on BTC’s price action.
Currently, USDT and USDC make up almost 50% of the total transaction volume in major crypto assets. If history is any guide, this could push BTC back below $62k, which is the established local low.
As a result, a significant amount of liquidity has flowed into Bitcoin as investors viewed $62k as a new low and bought the dip. Each time, Bitcoin faced strong resistance around $65k, resulting in significant pullbacks.
Bitcoin’s Price Action: USDT Dominance Drops, Capital Flows Into BTC
The cryptocurrency market has seen a noticeable surge in liquidity over the past seven days, following Bitcoin breaking through key psychological levels.
