Tether’s USDT share of the cryptocurrency market has fallen 8.4% over the past seven days, a sharp decline that many traders are seeing as a bullish signal for altcoins. According to market data, USDT’s dominance has declined to 4.37% from 4.74% last Friday.
Analysts explained that a decline in USDT’s dominance typically means investors are moving from stablecoins to riskier assets such as Bitcoin and altcoins in search of higher returns. The recent decline coincided with an overall rally in the broader crypto market.
Related: Declining USDT dominance hints at potential recovery in altcoin market
USDT dominance declines by more than 8% in one week
Although there are several other stablecoins in the cryptocurrency market, USDT stands out as the most in-demand of the group and is thus the preferred potential market indicator for most cryptocurrency traders.
It is worth noting that the recent decline in USDT dominance coincides with a sharp rise in the overall crypto market, with Bitcoin and other top cryptocurrencies experiencing notable gains.
Altcoins benefit from capital rotation
Analysts’ latest predictions suggest that USDT’s dominance will further decline, leading to inflows into other cryptocurrency ecosystems. He identified several altcoins such as ASTER, ENS, SPL, SOL, APEX, and ICP as potential markets that could absorb inflows from the stablecoin ecosystem.
ASTER, one of the altcoins identified by analysts, has rebounded sharply from its recent downtrend. The cryptocurrency rose more than 18% in less than 48 hours, reversing the decline of the previous seven days that caused a 37.83% decline in digital asset prices.
Solana (SOL), perhaps the most prominent cryptocurrency on the latest list of crypto analysts, has rebounded strongly over the past week, surging more than 18% in the past seven days and rallying past the $200 landmark. According to TradingView data, SOL was trading at $225 at the time of writing.
Related: USDT’s dominance fluctuates as analysts predict impending alternative season
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