About stablecoin dominance: current signals and let's dig into the forecasts for 2023.
Currently, locally, for the first time since December 24, stablecoin dominance has transitioned to a stable uptrend on the 4-hour timeframe.
This is not good for the market outlook in the coming days and does not align with the reversal candle of BTC on the 12-hour timeframe. Unless, just before the downward reversal, the nearest targets for stablecoin dominance will be worked out with an impulse before the end of the day.
In general, the dominance of #USDT + #USDC has been growing since December 5, largely mirroring the movements of #BTC. If the growth of stablecoin dominance continues today or in the coming days - it will be important not to close above EMA 50 on the 12-hour timeframe (currently 5.93%) or at least EMA 200 on the daily timeframe (currently 6.32%).
We last discussed USDT dominance (for some reason USDT, not USDT+USDC, but it doesn't matter, they are very similar) back on December 14. We also analyzed BTC dominance then. The situation seemed much clearer back then, but it does not look critical now either.
What bad happened since December 14? On December 18-19, dominance broke the descending trend line from October 27, 2023 (marked with a dashed line).
And made several retests of the breakout. At the same time, it consolidated above the EMA 50 on the daily timeframe. And formed a 'Bullish Flag'. These are all bearish signals for the market, and the only (but significant) consolation is that such signals on a bullish market have already broken on this chart, and not once. For example, currently, stablecoin dominance on the two-day timeframe has marked a potential high (the first of three possible consecutively). And just this alone can break all short signals or minimize their fulfillment. Just because the market is at such a stage right now.
In the worst-case scenario that we currently see for the crypto market, the bounce will be up to a substantial level of 6.38%. This is near the mentioned EMA 200 on the daily timeframe. This is a scenario where BTC would go plus or minus around $85,000. BUT neither a BTC bull run, nor an ETH bull run, nor a large-scale altseason will change that. The cycle goes its own way, while the crowd is convinced otherwise, and they believe it.
Let's go back to last year and see how our forecasts performed:
- On October 23, 2023, we wrote: On the USDT and USDC dominance chart - today there is an important breakout downwards. This was a breakout of a substantial and mirror level of 9.78%, which we later adjusted to 9.65%. Why was it important? The answer is below 👇
- On August 23, 2023, we first wrote: 'The most interesting for bulls in the crypto market will begin with a correction of dominance below the level of 9.78% and a consolidation below the level of 9.10%. Probably, a bull run will start at that time.'
What happened on the charts after October 23, 2023 - everyone knows. The market is going its own way, rewarding the patient.
And we will give a new forecast for 2025. The most interesting for altcoins will begin with the stablecoin dominance breaking the level of 4.45%. This will already be an obvious altseason for everyone with much worse entry points than now. Nobody will doubt it anymore. But at this time, intensive distribution to the crowd of early holders will also begin.