USDT Dominance

USDT is the most capitalized stablecoin on the crypto market today. In a way, it represents an unofficial Digital Dollar, since 1 USDT is always supposed to be worth $1.

Crypto pairs are generally exchanged for USDT, not $ or €, and when investors take profits on the market, they usually remain in stablecoin, enabling them to quickly reinject funds into other cryptos if they wish, but above all to secure gains without putting them back into fiat currency and paying taxes on the capital gain.

Stablecoins play a very important role in the market, with Tether's USDT capitalized at $82 billion, USDC at $26 billion, and BinanceUSD at $3.4 billion. Between them, these 3 stablecoins will represent over $108 billion by august 2023. We're now going to find out how we can study the behavior of investors in relation to stablecoins in order to make market decisions.

The chart to study is called USDT.D!

It represents the strength (Dominance) of the stablecoin USDT on the crypto market, and as you'll have gathered, if investors want to buy USDT, it's to sell their cryptos, so it's a double action that both lowers the price of the crypto being sold, and increases the rarity of USDT and the money invested in it, hence its capitalization and dominance on the market. Our goal will therefore simply be to try and anticipate when investors' money will move into USDT, in order to anticipate a possible high point in the market; and consequently take profits or a bearish position. Conversely, when signals show that money is about to leave stablecoin (as the USDT Dominance chart is bearish), it's time for us to position ourselves in the market by buying cryptos.

Below you'll find a comparison of the Bitcoin and USDT charts.D, take the time to study and understand them well, you'll realize that the charts are almost simply reversed.

In other words, when a large number of investors sell their cryptos to convert them into USDT, the latter will rarify and regain strength, and if it regains strength, this causes the price of all the cryptos indexed on it, such as the BTC/USDT pairs, etc., to fall.

This chart is highly relevant and very important for timing Tops and Bottoms on Bitcoin and the rest of the market. So you see, when USDT.D falls, the crypto market rises as capital flows into it, and vice versa. Signs of Bottoms on the USDT.D are therefore bad signs for cryptos, while signs of Tops are rather encouraging.

Below, you will find the analysis of the USDT.D chart in comparison with that of Bitcoin. You will realize how important this chart is for monitoring the progress of the crypto market. These analyses can be somewhat challenging to grasp for a beginner, so make sure to take your time to understand the charts and annotations carefully!