Tether Dominance May Drop 25% Triggering Crypto Rally

Tether’s market dominance is currently at 4.83%, but recent analysis suggests a potential decline to 3.6%. This forecast is based on a bearish flag pattern observed on the USDT.D 3-day chart, which has repeated three times over the past three years. The pattern indicates a potential downturn in Tether’s dominance, which could signal a broader market rebound for digital assets.

The bearish flag pattern is characterized by a sharp initial decline followed by a tight upward channel. This structure has been observed in previous instances, such as in September 2023 and March 2024, and has historically led to further declines in USDT.D percentage. The target zone for this decline is marked just above 3.6%, with previous bounces acting as soft landing points.

According to the analyst's forecast, the 3.6% target is bullish for the rest of the crypto market. A drop in Tether’s dominance often reflects capital flowing into Bitcoin and altcoins as traders shift out of stable assets. This could ignite positive momentum across riskier crypto categories, potentially marking the beginning of a broad-based crypto rally.

The repetition of this pattern across multiple timeframes strengthens its validity. Traders often use such chart behaviors to anticipate potential risk-on environments, particularly when stablecoin dominance drops. The overhead curve added to the chart connects the previous highs, showing a broader downtrend forming across multi-month intervals. This aligns the bearish flag structures within a long-term descending framework.

The social response to this analysis has been mixed, with some traders expressing excitement about the potential for a crypto rally, while others remain cautious. The post sharing this insight gained significant traction online, with 783 likes and over 130 reposts within 24 hours. This reflects growing trader interest in dominance metrics as a directional signal.

The observed chart formation, with consistent patterns and key levels, has sparked fresh discussions around potential altseason triggers. Market watchers are now tracking this setup closely to determine its impact on altcoin performance. The potential decline in Tether’s dominance could signal a larger trend of capital rotation into more volatile digital assets, potentially leading to a broader market rebound.