The market share of the stablecoin USDT is rising to an all-time high! Are Crypto Investors Fleeing to USDT to protect themselves from Impending Volatility?
USDT Market Share Rises to 7.34 %
USDT Market Share Chart by Tradingview
The market share of the USDT stablecoin increases to 7.34%, exceeding all existing high points. When the crypto market crashed in 2020 and Bitcoin reached around $3,800 and Ethereum fell to around $90, USDT’s market share was only around 4.16%. Thus, the current market share is about 85% higher than at the time of the biggest crash of the crypto market in the last 5 years.
Is there a negative correlation between the USDT market share and the Bitcoin price?
USDT Market Share Chart by Tradingview
Since Bitcoin is mainly traded against USDT, it is only logical that USDT’s market share will increase if the BTC price falls. After all, Bitcoin is mostly sold for USDT. Therefore, it is plausible what one can see here: if the Bitcoin price is at a high point, the USDT market share is at a low point. Vice versa, the Bitcoin price is at a low point when the USDT market share reaches 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 Compared to USDT Dominance
USDT Market Share Chart by Tradingview
The USDT dominance is different from 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 here BTC was bought more and more with USDT.
Between May 2021 and June 2021, both the market share of Bitcoin and USDT increased. So, more and more cryptocurrencies for BTC and USDT were sold here.
This behavior now seems to be happening again, because since April of this year, both BTC dominance and USDT dominance have been increasing.
A sign that the crypto market is entering a recession, while stablecoins and BTC as a “store of value” still remain the first choice?
The Crypto Market Could Now Halve
Crypto Market Capitalization Price Chart by Tradingview
The crypto market is about to bearishly break the Golden Ratio at the 50-month EMA at around $1 trillion market capitalization. Thus, the market capitalization of the crypto market could shrink to around 535 billion USD, because only between 535 – 770 billion USD the crypto market expects significant support.
This would put the crypto market back on a market capitalization that it already reached in 2018.
Bitcoin Dominance Could Rise to 52%
Bitcoin Market Share Chart by Tradingview
The Bitcoin dominance is very bullish on the monthly chart. The MACD’s histogram continues to tick bullish higher and the MACD lines remain crossed bullish. Bitcoin’s market share could now rise to 52% before encountering 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
USDC Market Share Chart by Tradingview
The USDC stablecoin is also climbing to a record high of 5.73%. Thus, the combined market share of the two stablecoins USDC and USDT is around 13%. Stablecoins like BUSD are not even included in this.
However, if the stablecoins do not leave the exchanges and wallets, in which they are converted into FIAT and paid out to bank accounts, this is a very bullish sign.
After all, there is a lot of liquidity available to buy up certain price ranges of Bitcoin, Ethereum and other cryptocurrencies.
