Though Bitcoin prices are fast-dropping, looking at events in the daily chart, one analyst thinks the coin is gearing up for a comeback, citing developments in the USDT dominance chart, or USDT.D.
USDT Dominance Falling, Good For BTC?
Taking to X on April 29, the analyst said USDT.D recently fell, breaking below a critical support trend line. Thus far, USDT.D faces strong rejections at immediate resistance levels, signaling weakness.
All this, while considering the inverse relation the USDT.D chart has with Bitcoin, the analyst now expects the world’s most valuable coin to tear higher, reversing recent losses and rejuvenating the broader crypto scene.
To understand what’s going on, one has to understand what the USDT.D chart represents. In essence, it compares the market capitalization of USDT, the world’s largest stablecoin, versus the total market capitalization of other stablecoins, including USDC, DAI, FUSD, and every other USD-pegged asset.
This chart reflects the dominance of USDT in the stablecoin scene. However, analysts have also been using this chart to gauge sentiment and correlation with Bitcoin.
As expected, USDT.D and Bitcoin, analysts note, enjoy an inverse correlation. Since stablecoins like USDT act as a safe haven when prices are plunging, USDT.D will rise when BTC prices are plunging and fall whenever Bitcoin is tearing.
Following the drop below the support trend line and dipping USDT dominance, the analyst predicts Bitcoin prices will stabilize and even expand in the sessions ahead. So far, BTC is under pressure, shrinking by over 15% from all-time highs.
Meanwhile, the USDT.D chart has found resistance. If it rejects, it could signal the resumption of Bitcoin’s early Q1 2024 uptrend.
Bitcoin Bears Pressing On: Next Stop $60,000?
Currently, Bitcoin is trending lower but above $60,000. Despite the slowdown, the possibility of BTC finding traction and expanding, even reclaiming $73,800, cannot be discounted.
The analyst expects a “massive leg up” for Bitcoin should USDT.D continue falling, aligning with the support trend line break. According to the analyst’s projection, BTC can rally above the all-time high towards $80,000 or even higher.
Even so, though the analyst is optimistic, BTC prices will not be guaranteed to fly because of shrinking USDT dominance.
Shifting market dynamics, including institutional adoption via spot Bitcoin exchange-traded funds (ETFs) and even regulatory developments, such as the United States Securities and Exchange Commission (SEC) initiating charges against stablecoins as it did for BUSD, can impact Bitcoin prices or USDT dominance.
Feature image from Shutterstock, chart from TradingView
Read More: USDT Dominance Falling, Analyst Predicts Bitcoin To Reach $80,000
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