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Stablecoin dominance to fall once again? Impact on Bitcoin’s market will be a significant shift in the crypto space
The cryptocurrency market has witnessed a steady decline in stablecoin dominance, and all signs suggest that this trend may continue. In the short term, a drop in stablecoin dominance could lead to an increase in capital rotation towards Bitcoin, ultimately causing a surge in its value.
Stablecoin dominance is currently moving within a descending channel on the 1-week chart. The data suggests that this channel has been respected since July 2023. A breakout is less likely but possible, as the trend remains intact.
Should stablecoins’ dominance drop, it could mark a significant shift in the market dynamics and potentially cause an uptrend for Bitcoin and some altcoins. Inversely correlated to the performance of altcoins, a rise in Bitcoin’s value would be indicative of investors opting for the flagship cryptocurrency over other alternatives.
The 60% level has served as resistance and support on two separate occasions – November-December 2024 and May 2019. There is a possibility that this pattern could repeat itself, with the price action potentially moving towards the 72% level.
The combined dominance of Tether (USDT) and USD Coin (USDC), currently at 7.19%, indicates that investors are increasingly seeking refuge in Bitcoin over other digital assets.
Source: https://ambcrypto.com/stablecoin-dominance-to-fall-once-again-impact-on-bitcoins-market-will-be/
