Tether’s dominance in the cryptocurrency market has increased sharply, reaching its highest level since April, underscoring the risk aversion in the broader cryptocurrency market.
Tether is the world’s largest dollar-pegged stablecoin and trades with a market capitalization of $184 billion at the time of publication. While the stablecoin is widely used to finance cryptocurrency purchases and for lending and borrowing activities, it is also a dollar equivalent within the cryptocurrency market, serving as a preferred store of value during turbulent times.
In other words, investors tend to park money in USDT and other dollar-pegged stablecoins when the market weakens. And the cryptocurrency market has been under pressure lately, with market leader bitcoin losing 11% this month to $97,630.
Historically, bear markets have been characterized by sharp increases in Tether dominance as traders seek to preserve capital. The onset of these bear markets often coincides with renewed bullish momentum in the USDT dominance, as reflected by the MACD histogram crossing above the zero line (bottom left).
