Crypto analysts have been utilizing various on-chain metrics and indicators to determine whether the Bitcoin top has already been reached in the current bull run. One particular analyst, Thomas, has highlighted the significance of USDT’s dominance in predicting Bitcoin’s market top.
In a post on X (formerly Twitter), Thomas pointed out that USDT dominance has accurately predicted every local top for Bitcoin over the past six years. He emphasized that whenever the USDT dominance touches the bottom of a trendline, there has been a clear local top for Bitcoin, as illustrated on the chart. Thomas suggested that using this metric would have allowed traders to sell at the top in previous cycles.
Thomas explained that it makes sense to use USDT’s dominance to forecast Bitcoin’s top because the trend of USDT-D over a longer period should be positive due to coin distribution occurring gradually. He also highlighted the significance of USDT-D in the market, as it reflects the movement of stablecoins in and out of the market.
Furthermore, Thomas noted that USDT dominance can also be inversely applied to predict the local bottom for Bitcoin. He mentioned that this metric has been successful in predicting every local bottom during previous bear markets, although it may not provide an exact estimate but rather a ballpark figure.
Based on the chart shared by Thomas, it appears that Bitcoin’s local top may have already been reached, as the USDT.D has once again touched the trendline. When questioned by a follower about whether this meant Bitcoin was heading for new lows, Thomas clarified that the market could bounce back up and retest the lower end of the USDT.D chart, similar to the last bull run.
The analyst expressed optimism that the market would retest the support line multiple times over the coming months, indicating that Bitcoin has more room to grow in this cycle before reaching its peak. Other analysts, like Rekt Capital, have also suggested that the cycle top has not yet been reached and historical trends point to the market top occurring sometime next year.
Thomas revealed his plan to use the USDT.D trendline to guide his longer-term trades in BTC/ETH, buying when USDT’s dominance is at the top of the trendline and selling when it hits the bottom. As of the time of writing, Bitcoin is trading around $56,400, showing a 4% increase in the last 24 hours according to data from CoinMarketCap.
In conclusion, the use of USDT’s dominance as a predictor for Bitcoin’s market top showcases the innovative ways in which crypto analysts are leveraging on-chain metrics to make informed trading decisions. Thomas’ analysis provides valuable insights into the potential trajectory of Bitcoin in the current market cycle, offering a strategic approach for traders looking to capitalize on market movements.
