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HomeNEWSUSDT Dominance Declines Significantly—Bitcoin and Altcoins Respond as Traders Reallocate Capital

USDT Dominance Declines Significantly—Bitcoin and Altcoins Respond as Traders Reallocate Capital

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YEREVAN (CoinChapter.com) — Tether’s market cap reached $145.6 billion in April 2025, according to CoinMarketCap. This marks an $8.5 billion increase since January. Despite the expansion, USDT Dominance (USDT.D) has declined, indicating reduced stablecoin share in the overall crypto market.

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USDT Dominance shows how much of the total crypto market cap belongs to Tether. A drop in this metric means traders are converting stablecoins into other crypto assets. In April alone, $1.6 billion in new USDT entered circulation, yet USDT.D trended downward.

This drop signals that investors may be shifting capital from Tether to Bitcoin and altcoins. The decline in USDT Dominance comes at a time when many assets are recovering from earlier selloffs.

Bitcoin Price Moves as USDT Dominance Breaks Support

Max, the founder of BecauseBitcoin, posted a chart comparison on X. He highlighted the symmetry between Bitcoin’s price and USDT Dominance. According to Max, every decline in USDT.D aligns with a Bitcoin price surge.

USDT.D recently fell below a resistance level near 5.5%. Max said,

“I think this really should be the breakdown for USDT.D & subsequently the push higher for BTC.”

This level has served as resistance multiple times before.

Bitcoin price movements in April have strengthened, following the same pattern. USDT.D and Bitcoin both broke their technical levels around the same time, indicating capital rotation in the market.

The chart data matches previous cases where Bitcoin gained momentum as USDT Dominance decreased. These shifts are tracked by traders watching market signals and on-chain behavior.

Stablecoin Dominance Index Faces Resistance

Another signal is the combined USDT.D and USDC.D index. This index includes both Tether and USD Coin. Cryptosahintas, a crypto investor, posted that the combined index reached 8% this month, hitting a known resistance level.

A reaction from this level often suggests that stablecoins are being sold off. When stablecoin dominance drops from resistance, it typically signals money entering altcoins. Cryptosahintas said this pattern could continue down to 3.5%.

Data from April shows stablecoins facing pressure. This has coincided with growing altcoin volume. Traders use such index moves to track where capital flows across the crypto market.

The stablecoin dominance trend matches price changes seen in many altcoins. This further supports the interpretation that a rotation away from stablecoins is underway.

Altcoins Bounce as Crypto Market Cap Rises 6%

The total crypto market capitalization rose from $2.68 trillion to $2.88 trillion this month, according to market data. This 6% increase happened while USDT Dominance declined.

Altcoin prices have bounced in April, and data from the Fear and Greed Index supports this behavioral shift. The index climbed from below 40 on April 18 to a peak near 72 by April 23, indicating a strong shift from “fear” to “greed.” This rise reflects growing confidence across the market and signals that more traders are willing to take on risk.

The upward movement in sentiment coincided with a recovery in total crypto market capitalization and renewed altcoin trading activity. Decentralized exchanges reported higher volumes as traders moved capital out of stablecoins and into altcoins. This matches previous patterns where a rising Fear and Greed Index has accompanied increased demand for riskier crypto assets.

Although the index slightly declined to around 63 by April 24, it remains well above neutral territory. This suggests that positive sentiment continues to support the current trend. The chart shows that this is the highest level recorded since early 2025, making it one of the strongest sentiment rebounds in recent months.

Increased altcoin purchases during falling USDT Dominance highlight investor behavior. When USDT.D drops, funds often flow into volatile assets. This cycle has repeated multiple times across past market phases.

Stablecoin Minting Rises But Lags Previous Highs

10X Research released a report this month on stablecoin minting. Their analysts found that while minting has picked up in recent weeks, it still remains below levels recorded in late 2024. The data shows that more USDT has entered circulation in April 2025, yet the rate of increase has stayed moderate compared to previous market expansions.

The report avoided any forward-looking conclusions. Instead, it offered context from earlier market cycles. In those periods, stablecoin issuance rose during early recovery stages but did not always result in sustained rallies. Several times, surges in minting failed to translate into long-term price growth across Bitcoin or altcoins. According to 10X Research, historical examples show that supply expansion alone does not guarantee continued upside.

The firm emphasized a key distinction between stablecoin minting and actual market deployment. USDT entering circulation does not always signal that capital is entering volatile assets. The researchers stressed the need to monitor how much of the new supply flows into trading, rather than sitting idle on exchanges or in wallets. Without evidence of wide deployment, the implications for Bitcoin and altcoins remain limited despite rising supply levels.

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