How USDT Dominance Predicts The Top For Bitcoin

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.

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

How USDT’s Dominance Predicts The Top For Bitcoin

In an X (formerly Twitter) post, Thomas claimed that USDT dominance has predicted every Bitcoin local top for the past six years. According to him, each time the USDT dominance touches the bottom of a trendline — which the analyst highlighted on the chart — there has always been a clear local top for Bitcoin. Anyone who used this metric would’ve sold the top every time in the previous cycles, added Thomas.

It makes sense that USDT’s dominance can be used to predict Bitcoin’s top since the trend of USDT-D over a longer time frame should be positive as coin distribution happens over time. The USDT-D is also important because the market is driven by swaps in and out of stablecoins.

Meanwhile, according to Thomas, USDT dominance can also be applied inversely and used to predict the local bottom for Bitcoin. 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 that Thomas shared, Bitcoin’s local top may already be in, seeing as the USDT.D has again touched the trendline that the analyst referred to. When asked by one of his followers if 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.

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.

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