- USDT dominance forms a double top with neckline near 4.2%, signaling possible structural shift as capital prepares to rotate into cryptocurrencies.
- A confirmed breakdown below neckline levels projects targets under 3%, unlocking liquidity from stablecoins into Bitcoin, Ethereum, and wider altcoin markets.
- Bitcoin dominance shows a rare bearish MACD cross, previously seen in 2017 and 2021, aligning with the strongest altcoin rallies recorded.
Altcoins could enter a powerful rally if USDT dominance completes a breakdown from its double top structure, as technical signals suggest.
Double Top Formation on USDT Dominance
Analyst ๐๐ ๐ฆ๐ค๐ฅ๐๐โ๐ pointed out that the USDT dominance chart has printed a clear double top, often considered a reversal signal. Two rounded peaks have formed, showing rejection points that indicate a weakening hold for stablecoins.
The neckline of this pattern rests around 4.2โ4.3%. Price currently hovers near this demand zone, acting as a crucial support area. If this zone fails, the structure would complete, confirming a bearish breakdown.
A decisive fall below the neckline projects targets under 3%, suggesting a sharp rotation of liquidity out of stablecoins and into cryptocurrencies. This scenario has historically fueled strong rallies across Bitcoin and altcoins.
Liquidity Rotation Across Crypto Assets
A decline in USDT dominance indicates capital is leaving stablecoins for crypto assets. This flow often begins with Bitcoin before moving into Ethereum and then larger altcoins.
As confidence returns, investors typically chase higher returns in smaller-cap tokens. This behavior has repeatedly driven mid-cap and low-cap coins to outperform during altcoin seasons.
Sharp declines in USDT dominance during past cycles have coincided with explosive rallies across alternative cryptocurrencies. Market participants are closely monitoring the chart, seeing the potential for a repeat of these conditions.
Bitcoin Dominance and MACD Cross
Further weight comes from Bitcoin dominance charts. According to ๐๐ ๐ฆ๐ค๐ฅ๐๐โ๐, a bearish MACD cross has formed, a rare event only recorded in 2017 and 2021.
Both historical occurrences aligned with the strongest altcoin seasons in previous cycles. This technical signal, combined with weakening USDT dominance, suggests conditions could be forming for another rotation into altcoins.
The alignment of these indicators strengthens expectations of renewed momentum across alternative cryptocurrencies. Traders now watch for a confirmed breakdown as the possible spark for the next major altcoin surge.
Together, USDT dominance and Bitcoin dominance signals are positioning the market for potential structural change. If the neckline breaks, altcoins could see inflows not witnessed since the strongest rallies of prior cycles.
