Bitcoin Cycle Peak: How The USDT Dominance Could Predict The Top

Crypto analysts have used several on-chain metrics and indicators to analyze whether or not the Bitcoin top is already in for this bull run. This time, crypto analyst Thomas has alluded to USDT’s dominance to determine Bitcoin’s market top. 

How USDT’s Dominance Predicts The Top For Bitcoin

Thomas claimed in an X (formerly Twitter) post that USDT dominance has predicted every Bitcoin local top for the last six years. He noted that there has always been a clear local top for Bitcoin each time the USDT dominance touches the bottom of a trendline, which the analyst highlighted on the chart. Thomas added that anyone who used this metric would have sold the top every time in the previous cycles. 

The crypto analyst said it makes sense that USDT’s dominance can be used to predict Bitcoin’s top since the trend of USDT-D over a longer timeframe should be positive, as coin distribution happens over time. He added that the USDT-D is significant as the market is governed by swaps in and out of stablecoins.

Meanwhile, Thomas mentioned that USDT dominance can also be applied inversely and used to predict the local bottom for Bitcoin. He noted that it was also used to predict every local bottom for the previous bear markets. The analyst admitted that the USDT.D doesn’t necessarily give a precise estimate of the bottom, although he added that it “gives a good ballpark.”

The Local Top May Already Be In For Bitcoin

Based on the chart Thomas shared, Bitcoin’s local top may already be in, seeing as the USDT.D has again touched the trendline the analyst referred to. When quizzed by one of his followers about whether that was the case and whether Bitcoin was heading for new lows, Thomas replied that wasn’t necessarily what was going to happen, as the market can go back up and tap the lower end of the USDT.D chart, just like it did in the last bull run. 

The analyst is optimistic this will happen, as he said that he thinks the market will retest the support line “a few times over the coming months.” This would ultimately mean that Bitcoin has more room to run in this market cycle before reaching its bull run peak. Other crypto analysts, like Rekt Capital, have already affirmed that the cycle top isn’t yet in and that historical trends suggest that the market top will come sometime next year. 

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In the meantime, Thomas revealed that he will use the USDT.D trendline to guide his longer-term trades in BTC/ETH. He plans to buy whenever USDT’s dominance is at the top of the trendline and sell whenever it hits the bottom. 

At the time of writing, Bitcoin is trading at around $56,400, up over 4% in the last 24 hours, according to data from CoinMarketCap.

Featured image created with Dall.E, chart from Tradingview.com