Tether’s dominance in the cryptocurrency market has risen sharply, reaching its highest level since April, highlighting risk aversion in the broader cryptocurrency market.
Tether is the world’s largest dollar-pegged stablecoin, trading at a market cap of $184 billion at press time. Although stablecoin is widely used to finance crypto purchases and for lending and borrowing activities, it is also a dollar equivalent in the crypto market, serving as a preferred store of value during turbulent times.
In other words, investors tend to park their money in USDT and other dollar-pegged stablecoins when the market withers. And the crypto market has been under pressure lately, with market leader Bitcoin losing 11% this month to $97,630.
Historically, bear markets have seen a surge in Tether dominance as traders seek to preserve their capital. The start of these bear markets often coincides with renewed bullish momentum from USDT dominance, as evidenced by the MACD histogram crossing above the zero line (bottom left).
