As a seasoned crypto investor with several years of experience under my belt, I find Thomas’ analysis intriguing. His observation that USDT dominance has predicted local tops for Bitcoin in the past is an interesting metric to consider. Based on his chart, it appears that we may have already reached the local top for this bull run.
Crypto experts have employed various on-chain signals and pointers to assess if the Bitcoin peak has already been reached during this bull market wave. Notably, cryptocurrency analyst Thomas has hinted at US Dollar Tether’s (USDT) influence as a determinant for identifying Bitcoin’s market zenith.
How USDT’s Dominance Predicts The Top For Bitcoin
Thomas asserted in a recent post on X (previously known as Twitter) that the dominance of USDT has forecasted Bitcoin’s local peaks for the past six years. He pointed out that each time Bitcoin reached a local top, USDT dominance touched the bottom of a trendline, as illustrated on the chart. Thomas emphasized that employing this metric would have allowed one to sell the peak during earlier market cycles.
As a researcher studying the crypto market, I believe there’s a connection between the dominance of Tether (USDT) and Bitcoin’s price peaks. The reason being, the trend of USDT against the dollar (USDT-D) over an extended period tends to be upward due to the gradual distribution of coins in the market. Moreover, it’s essential to recognize that the crypto market’s dynamics are heavily influenced by swaps involving stablecoins like USDT.
Thomas pointed out an intriguing inverse relationship between Bitcoin’s local bottoms and USDT dominance during past bear markets. He emphasized that USDT.D has served as a decent approximation or “ballpark” figure for identifying these bottoms, even if not providing exact estimates.
The Local Top May Already Be In For Bitcoin
According to the data presented by Thomas in the graph, Bitcoin’s potential local peak might have been reached since the USDT.D indicator has touched the previously mentioned trendline once more. However, when pressed about the possibility of new lows for Bitcoin by one of his followers, Thomas cautioned that this wasn’t automatically the case. The market could bounce back and revisit the lower boundary of the USDT.D chart, as it did during the previous bull market.
As a crypto investor, I’m encouraged by the optimistic outlook of the analyst, who believes that Bitcoin will revisit the support line several times throughout the coming months. This means that there’s still potential for the price to climb higher in this market cycle before reaching its peak during the bull run. Similarly, Rekt Capital and other crypto analysts have pointed out that the market top hasn’t been reached yet, and historical trends indicate that we can expect the market to peak some time next year.
During this period, Thomas disclosed that he intends to apply the USDT.D trendline as a benchmark for his prolonged transactions in BTC/ETH. His strategy involves purchasing cryptocurrencies when USDT’s influence reaches the peak of the trendline and selling them when it touches the bottom.
Currently, Bitcoin is priced approximately at $56,400 based on latest information from CoinMarketCap, marking a roughly 4% increase within the past 24 hours.
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2024-07-07 07:11