Bitcoin: Time to Buy According to Tether Dominance

by Justin Bennett  · 

March 22, 2022

by Justin Bennett  · 

March 22, 2022

by Justin Bennett  · 

March 22, 2022

Recent Bitcoin price action is reminiscent of last year’s June to July price action, but BTC remains mostly sideways.

However, Tether dominance is also repeating something from last year that occurred right before a 60% rally from Bitcoin.

So in today’s video, I discuss what the Tether dominance chart is and how it can help us prepare for what’s to come from BTC.

Bitcoin has been sideways for most of 2022 after falling 52% from its all-time high in November.

Even the last 15 months have seen mostly sideways action for BTC between $30,000 and $70,000.

However, the consolidation that’s occurring now looks similar to what we saw in June and July of 2021.

The highs and lows don’t match up exactly, but multi-month consolidation above macro support is nothing new for Bitcoin.

But the question is, will BTC break higher like it did last year?

The Bitcoin chart has a lot of work to do before we can answer that confidently. 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 for Bitcoin.

Tether is the first and largest Stablecoin. It’s a cryptocurrency that runs on the Ethereum blockchain and roughly tracks the US dollar price.

So it’s essentially a crypto used for payment in USD.

Now, Tether dominance refers to how much capital is parked in the stablecoin at any point in time.

Since Tether is a stablecoin that tracks the US dollar, an increase in dominance suggests a pullback from cryptos like Bitcoin, Ethereum, etc.

Think of it as USD flowing out of the crypto market.

On the other hand, if Tether dominance drops, more capital is being deployed to assets like Bitcoin, which is bullish overall.

The Bitcoin to Tether dominance comparison below says it all.

Bitcoin to Tether dominance daily time frame

The two clearly share an inverse correlation, which makes sense.

So 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 time frame

As you can see, USDT.D is starting to break down from an ascending trend line from the November lows.

And as explained in the video above, the last time Tether dominance broke a similar trend line support was on July 23rd, right before Bitcoin rallied 60%.

Interestingly, Bitcoin is still trading in consolidation just like it was last year in late July.

So while there are no guarantees, the similarities are uncanny, and today’s breakdown from USDT.D could have profound bullish implications for Bitcoin in April.

But as always, today’s close will be a significant part of the story.

As for Bitcoin, a daily close above $46,000 would clear the way for $53,000 and potentially $60,000 over the next few weeks.

Support comes in between $37,000 and $38,000.

BTCUSDT daily time frame

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  1. Thank you Justin, this comparison makes a perfect sense given the negative correlation between the two. thanks million times and God bless

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