- USDT Dominance shows a bearish retest below 4.55% after wedge breakdown, suggesting continued downside pressure as Bitcoin gains strength above resistance.
- The red resistance zone remains the battleground, where rejection favors crypto inflows, while a flip above signals renewed stablecoin demand.
- Bitcoin’s breakout aligns with declining USDT Dominance, reinforcing inverse correlation and supporting potential upside if dominance fails to reclaim resistance.
USDT Dominance is undergoing a bearish retest after breaking down from a rising wedge, while Bitcoin strengthens above descending resistance. Market direction now hinges on whether USDT.D sustains below or reclaims the critical red zone.
Bearish Setup in USDT Dominance
Crypto analyst Scient noted that USDT Dominance (USDT.D) on the 4-hour chart shows a bearish retest. The move follows a breakdown from a rising wedge, a common bearish reversal formation that signals weakening momentum.
The current retest is centered around the red resistance box near 4.55%, which previously acted as strong support. Remaining below this area favors continued downside in USDT.D, suggesting improved investor risk appetite and rotation into crypto assets.
Targets below the current level include 4.35%, 4.15%, and potentially sub-4%. Each breakdown level would support sustained upside in Bitcoin and Ethereum. However, flipping the red box into support would invalidate the bearish thesis and point to renewed stablecoin inflows.
Inverse Correlation With Bitcoin
USDT Dominance often moves inversely to Bitcoin, as capital leaving stablecoins typically finds its way into digital assets. A sustained decline in USDT.D has historically aligned with upward moves in Bitcoin and Ethereum.
At present, Bitcoin has broken through descending resistance, signaling renewed buying interest. This move is being closely watched, as confirmation of strength requires continued pressure on USDT.D to the downside.
If USDT Dominance fails at the red zone and continues lower, it would strengthen the case for further Bitcoin upside. Conversely, a recovery above resistance could trigger a risk-off environment, weighing on major cryptocurrencies.
Key Levels to Watch
The red resistance zone remains the pivotal level for determining whether the bearish setup in USDT.D continues. Traders are monitoring this level as the battleground where the next directional move will be confirmed.
A rejection at the red box would leave room for further downside targets and support Bitcoin’s breakout continuation. Such a scenario aligns with increased risk appetite and a shift from stablecoins to crypto assets.
However, a flip and hold above the red box would shift the bias. That would signal renewed stablecoin demand, potentially challenging Bitcoin’s breakout and slowing upward momentum in the broader market.
