Tether Reaches Highest Dominance Since April, Underscoring BTC Downtrend

Tether’s dominance in the cryptocurrency market has grown dramatically, reaching its highest level since April, underpinning risk aversion in the broader crypto market.

Tether is the world’s largest stablecoin pegged to the dollar, trading at a market capitalization of $184 billion at press time. While the stablecoin is widely used to finance crypto purchases and for lending and borrowing activities, it is also a dollar equivalent in the crypto market, serving as a preferred store of value during turbulent times.

In other words, investors tend to park money in USDT and other dollar-pegged stablecoins when the market goes up. And the crypto market has been under pressure lately, with market leader bitcoin losing 11% this month to $97,630.

Historically, bear markets have been marked by a sharp increase in the dominance of tether, as traders seek to preserve capital. The beginning of these bear markets often coincides with a renewed bullish momentum in the dominance of the USDT, as reflected by the crossover of the MACD histogram above the zero line (below left).