Bitcoin’s recent price action is reminiscent of the June-July price action of last year, but BTC remains mostly sideways.
However, Tether dominance also echoes something from last year, which happened right before a 60 percent rally in Bitcoin.
So in today’s video I’m going to discuss what the Tether dominance chart is and how it can help us prepare for what is to come from BTC.
Bitcoin has been sideways for most of 2022 after falling 52% from its all-time high in November.
Even in the last 15 months, BTC has been mostly sideways between $30,000 and $70,000.
However, the consolidation currently taking place looks similar to what happened in June and July 2021.
The highs and lows don’t match exactly, but a multi-month consolidation above macro support is nothing new for Bitcoin.
But the question is, will BTC surge higher like last year?
The bitcoin chart still has a lot to do before we can confidently answer that. However, the Tether dominance chart is trying to tell us something today.
Before we get to that, let’s discuss Tether dominance and why it matters to Bitcoin.
Tether is the first and largest stablecoin. It is a cryptocurrency that runs on the Ethereum blockchain and roughly replicates the US dollar price.
So it is essentially a crypto used for payment in USD.
Now, Tether dominance refers to how much capital is parked in the stablecoin at any given time.
Since Tether is a stablecoin that tracks the US dollar, increasing dominance indicates a retreat from cryptos like Bitcoin, Ethereum, etc.
Think of it as USD flowing out of the crypto market.
On the other hand, if Tether dominance wanes, more capital will be invested in assets like Bitcoin, which is bullish overall.
The following Bitcoin to Tether dominance comparison says it all.
Daily timeframe for Bitcoin to Tether dominance
The two clearly share an inverse correlation, which makes sense.
Let’s now turn to the USDT.D (Tether Dominance) chart to get an idea of what’s happening this week.
Tether Dominance (USDT.D) daily timeframe
As you can see, USDT.D is starting to deviate from the November lows from an ascending trend line.
And as explained in the video above, the last time Tether dominance broke through similar trendline support was on July 23, just before Bitcoin gained 60%.
Interestingly, Bitcoin is still trading in consolidation, just like it was at the end of July last year.
So while there are no guarantees, the similarities are uncanny, and today’s USDT.D collapse could have profound bullish implications for Bitcoin in April.
But as always, today’s conclusion will be an important part of the story.
As for Bitcoin, a daily close above $46,000 would pave the way for $53,000 and possibly $60,000 in the next few weeks.
Support is between $37,000 and $38,000.
Would you like access to the forums, weekly coaching calls and courses?
Get a lifetime membership today and receive exclusive members-only content, including one to two new videos every day. Save 40% in March!
BTCUSDT daily timeframe
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.