USDT Dominance Hits Key Resistance: Turning Point for Bitcoin and Altcoins

In recent months, the USDT Dominance (USDT.D) index has experienced a rapid rise. A 20% increase in October suggests investors moved funds out of risky assets and into “haven” stablecoins. However, as the index approaches a long-term resistance level, a key question arises: Is this a sign of an impending market correction—or the beginning of a new bullish cycle for Bitcoin and Altcoins? USDT.D Hits Resistance: A Crucial Turning Point for the Market According to data shared on X, USDT Dominance (USDT.D) has steadily increased for the past six months. It recently hit a short-term peak and is approaching a long-term descending trendline, a resistance zone that has historically capped USDT.D rallies. USDT.D chart. Source: TradingView Technical analysts are split into two sides. One believes that USDT.D could face a strong rejection at this resistance, similar to previous instances that coincided with Bitcoin (BTC) price bottoms and subsequent recoveries, such as the FTX crisis in 2022. Conversely, if the index breaks above this resistance, the next primary target could be around 6.5%, signaling further capital outflows from risk assets and potentially deeper price declines in crypto. USDT.D chart. Source: X Another noteworthy pattern is the bearish head-and-shoulders formation emerging on the 4-hour chart. If confirmed, USDT.D could rally to 5.7% before correcting, suggesting that the upcoming market phase may be marked by heightened volatility and a war between fear and optimism. USDT Dominance 4H chart. Source: X Based on the overall technical picture, there’s a strong chance that USDT.D could experience a short-term rejection at the resistance level, providing temporary relief for the altcoin market before the market establishes a more defined medium-term trend. This short-term pullback could serve as a healthy pause, allowing risk appetite to recover briefly before the next move. Implications for Bitcoin and Altcoins Mechanically, when USDT.D rises, the share of stablecoins in total crypto market capitalization increases, indicating that investors are moving to cash and adopting a risk-off stance. Conversely, when USDT.D declines, funds typically flow back into risk assets, with Bitcoin leading the recovery, followed by altcoins. Hence, USDT Dominance is a key liquidity indicator for the entire crypto market. Some analysts believe the current resistance zone could be a critical inflection point. If USDT.D fails to break through, it could signal that Bitcoin has already bottomed or is very close to its bottom. In that scenario, altcoins may outperform in percentage terms, given their smaller size and higher sensitivity to capital inflows. On the other hand, a decisive breakout above resistance could trigger a short-term sell-off, particularly among low-cap Altcoins, where investor sentiment is most fragile. While USDT.D is hovering near resistance, additional confirmation signals, such as declining trading volume or a clear reversal candle, are needed to validate a sustained recovery. Risk management should take priority over aggressive positioning, as investors monitor USDT.D alongside Bitcoin’s price action. Once the dominance index begins to decline steadily, it could serve as a clear signal that liquidity is returning to the crypto market. The post USDT Dominance Hits Key Resistance: Turning Point for Bitcoin and Altcoins appeared first on BeInCrypto.