The Tether Dominance (USDT.D) indicator rose to 4.69%, the highest in the last two months. The growth of the stablecoin’s market share usually indicates investor caution and increases risks for Bitcoin and altcoins.
What is USDT.D and why is it important
The USDT.D metric reflects Tether’s share in the total capitalization of the cryptocurrency market. Its movement is closely linked to the dynamics of Bitcoin and altcoins. When the indicator decreases, it means traders are more actively spending USDT to buy risky assets. When Tether’s share rises, on the contrary, market participants are taking profits and moving into stablecoins.
This is why the growth of USDT.D is interpreted as a ‘caution signal.’ It indicates a shift of capital into defensive assets and often precedes a correction.
The market is showing alarming signs
In the last week of September, USDT.D rose to 4.69%, the highest level since July. Analysts warn: if the indicator breaks the 5% level, it could confirm the development of a bearish scenario.
The market is reacting nervously. TradingView data once again confirms the inverse correlation between USDT.D and the total crypto market capitalization. Each time Tether’s share increased, the market value of Bitcoin and altcoins decreased.
Analyst Jason Pizzino noted that the market is now at a key crossroads:
‘This is exactly the breakout that bulls don’t want to see. If USDT.D consolidates above 5%, it could be a turning point. But for now, we hope for a pullback down.’
Technical and fundamental picture
Most forecasts are based on technical analysis: resistances, trend lines, and risk zones. However, fundamental factors also point to caution.
- USDT reserves on exchanges have reached record levels.
- There are record inflows of stablecoins.
- In September, Tether accelerated the issuance of new USDT.
All this reinforces the impression that traders are massively moving into stablecoins, preparing for a possible drop.
The founder of BecauseBitcoin, known as Max, believes the situation could be the final phase of the decline before growth in Q4:
‘The technical picture points to another move to the lows. But fundamentally, selling now makes no sense. We are close to forming a major bottom.’
What’s next?
The September decline has intensified discussions about whether the market is heading for a long-term bearish trend or if this is just a short-term trap. The growth of USDT.D has become one of the key indicators that more and more participants are paying attention to.
However, it is risky to consider it separately from other signals. Only in combination with trading volumes, the dynamics of Bitcoin, altcoins, and macroeconomic data can the true direction of the market be assessed.
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