The dominance of USDT+USDC shows potential high signals on the 4-hour timeframe.
Mirroring the potential low signals at #BTC and a number of altcoins led by #ETH. Also, dominance is currently approaching local trend resistance - descending since December 20.
The last time we analyzed the dominance of key stablecoins was on December 30. At that time, there was a contradiction in the market - the dominance of #USDT and #USDC transitioned into a stable uptrend on the 4-hour timeframe, while #BTC showed a potential low signal on the 12-hour timeframe. Everything resolved according to the principle of the importance of the higher timeframe - the BTC rate rose without pullbacks until January 7 after that signal. From the stablecoin dominance review on December 30, we want to highlight this:
‘…If the growth of stablecoin dominance continues today or in the coming days - it will be important not to close above the 50 EMA on the 12-hour timeframe (currently 5.93%) or at least the 200 EMA on the daily timeframe (currently 6.32%)…’
Since yesterday, there has been a close above the 50 EMA on the 12-hour timeframe. Today, the question of closing above the 200 EMA on the daily timeframe will be resolved.
If at the close of the current four-hour candle, dominance does not drop below these resistances - unfortunately, the best outlook for the upcoming days may be a market range. In the worst case, it will lead to a test of the range of 6.24-6.38%. Where there are clusters of resistance from the EMA, trendline, and volume level. All of this was already written at the end of December.
In the overall picture for 2023-2025, the dominance of stablecoins continues to hold above the global descending trendline since October 27, 2023 (marked with a dashed line). Breaking this resistance on December 19, dominance has already tested it several times as support. This is negative for the bulls. In general, one cannot talk about the market returning to growth until the dominance of stablecoins moves into a stable downtrend at least on the hourly timeframe. This will be the first early signal that 'things are improving'. Overall, this trendline is very important.
Positively towards the end - a repeated return below the trendline since October 27, 2023, is likely to become the trigger for a move to 4.45%. And the most interesting for altcoins, we remind you, according to our assessment, will begin precisely when stablecoin dominance breaks the 4.45% level. This will be an obvious altseason for everyone, with much worse entry levels than now.
