Bitcoin is still benefiting from USDT.D’s decline
The mechanism is fairly straightforward. USDT.D represents Tether’s market capitalization relative to the crypto market as a whole. When its dominance declines, assets such as Bitcoin and altcoins generally account for a larger share of total market capitalization. This setup is currently accompanying Bitcoin’s recovery above its previous technical levels.
TradingView shows dominance near 6.9%, following a decline of more than 16% over one month. Several technical analysts are closely watching the zone between approximately 6.92% and 7.08%, while some weekly charts place an even deeper support level around 6.0–6.3%.
A further decline in USDT.D therefore remains possible. In this scenario, Bitcoin and especially some altcoins could have more room to extend their moves.
BTC has just moved above $85,000, its highest level in approximately eight months.
The 2023 precedent deserves attention
The problem arises if weekly support ultimately holds.
A bullish reversal in USDT dominance would mean that Tether is regaining weight relative to the rest of the market. This can happen when investors reduce their exposure to volatile cryptocurrencies or when Bitcoin and altcoins decline faster than USDT’s market capitalization.
A comparable setup accompanied the market in 2023. After Bitcoin bottomed at around $16,500 at the start of the year, BTC rose 72.4% in the first quarter, ending March at around $28,500. The total crypto market gained 48.9%.
This rally took place alongside a significant decline in Tether dominance from the extreme levels observed after FTX.
A subsequent rebound in USDT.D did not, however, send Bitcoin back to its cycle low.
That is precisely the distinction to keep in mind today.
A correction would not necessarily break the bull market
Bitcoin can therefore correct without invalidating its current structure.
BrefCrypto had already noted that the $58,000 to $60,000 zone represents a much deeper invalidation level for some analysts. There is considerable room for an intermediate correction between the current price and that zone.
Altcoins would probably be more sensitive. During the market’s last pullback, meme coins had already fallen much faster than Bitcoin. This is generally what happens when investors reduce their risk: Bitcoin holds up better, while smaller-cap assets absorb much more violent moves.
USDT.D is therefore becoming a particularly interesting chart to monitor over the coming weeks. A clear break below its support would probably extend the favorable window for cryptocurrencies. Conversely, a weekly reversal would open the door to profit-taking in BTC and a deeper correction in altcoins.
Not necessarily a new bear market.
Rather, the kind of breather that bull markets also experience.
