Tether (USDT) Increase Shows Signs of Bear Market

Tether's (USDT) market dominance has climbed to its highest level in recent months, indicating that investors are moving away from risk. The pressures experienced in the cryptocurrency market in recent weeks have led investors to turn to stable assets like Tether (USDT), which is pegged to the dollar. The drops observed in almost all major digital assets have caused USDT's share of the total market to rise to its highest level since April. The world’s largest dollar-pegged stablecoin, Tether, currently has a market capitalization of approximately $184 billion.

USDT serves as a funding mechanism for crypto trading, as well as in lending/borrowing transactions and acts as a safe haven during uncertain times. Therefore, when the market fluctuates, investors frequently switch to USDT to create cash positions. The recent weakness in the market has further reinforced this trend. Bitcoin (BTC) has dropped by 11% since the beginning of the month, falling to the $97,630 level, while altcoins have observed heavier losses.

As the inclination toward USDT increases in this environment, the rise in stablecoin dominance is historically seen as a typical sign of bear cycles. Is the increase in USDT dominance a bear signal? Looking at past data, the beginning of bear markets in the crypto market often correlates with periods of rapid increases in Tether dominance. This situation reopens the discussion of investors exiting risky assets and moving toward more stable instruments like USDT out of a capital preservation reflex.

Analysts indicate that especially the MACD histogram moving above the zero line suggests a renewed momentum in USDT dominance. This view shows that the market is still in a cautious area and that investors are reluctant to take risks. If USDT dominance continues to rise, it may be interpreted as a signal that weakness in the crypto market could persist in the short term.