USDT Dominance is an index used by many traders to make predictions about the crypto market. So what is USDT Dominance? Let's explore it through this article!
What is USDT Dominance (USDT.D)? Learn detailed information about the USDT.D index
What is USDT?
USDT is a stablecoin issued by Tether Limited, a company under the jurisdiction of the laws of the British Virgin Islands and established in Hong Kong. USDT is Pegged to the US dollar at a 1:1 ratio, meaning the price of 1 USDT will always be maintained at $1.
USDT is currently the stablecoin with the largest market capitalization, with over $120.35 billion, 3.4 times higher than the next one, USDC.
Market capitalization of the top 5 stablecoins. Source: Coingecko (30/10/2024)
What is USDT Dominance (USDT.D)?
USDT Dominance (USDT.D) is the percentage of USDT's market capitalization over the total market capitalization of the entire crypto market. This is considered a fairly common index used by crypto investors to support their investment decisions.
For example, if the USDT.D index is 10%, it means that the market capitalization of the USDT stablecoin is accounting for 10% of the total market capitalization.
What is USDT Dominance (USDT.D)?
How to Calculate USDT Dominance
The formula for calculating USDT Dominance is as follows:
USDT.D = (USDT's market capitalization / Total crypto market capitalization) * 100
Platforms Tracking the USDT Dominance Index
You can track the USDT.D index on the following platforms:
Trading View
Chartunit
Coinview
Trading View
Access here to view the USDT.D chart.
Trading View
Chartunit
Access here to view the USDT.D chart.
Chartunit
Coinview
Access here to view the USDT.D chart.
Coinview
The Meaning of USDT Dominance
USDT is the most popular stablecoin in the crypto market at the moment. Fluctuations in the USDT strength index will provide users with forecasts about market sentiment.
When the USDT.D index rises, it means that investors are trying to preserve their capital by selling other cryptocurrencies to hold USDT.
When the USDT.D index decreases, it indicates that investors in the market are confident in the growth of the market, with the action of selling USDT to hold other crypto assets.
The Correlation Between USDT Dominance and Bitcoin
Based on the correlation index between USDT.D and the Bitcoin price, we can see that USDT.D and Bitcoin have an inverse correlation. Specifically, when the Bitcoin price increases, the USDT.D index will decrease, and vice versa.
Correlation index between USDT Dominance and Bitcoin. Source: Trading View (30/10/2024)
Trading Strategies Based on USDT Dominance
In the short term, USDT.D can be used to identify potential trading opportunities.
When USDT.D Increases
If USDT.D is in an uptrend, the Bitcoin price will usually decrease. Therefore, investors may consider Shorting Bitcoin to generate profits.
When USDT.D Decreases
If USDT.D is in a downtrend, the Bitcoin price will usually increase. Therefore, investors may consider Longing or buying spot Bitcoin to generate profits.
Conclusion
USDT Dominance is an index that represents the strength of USDT in the crypto market. Through this article, Coin68 hopes that you have gained a basic understanding of USDT Dominance.
Note: The information in this article is not to be considered investment advice. Coin68 is not responsible for any of your investment decisions.
