Traders shift from bitcoin to stablecoins as USDT, USDC dominance rises
Bitcoin's market dominance has fallen from 61.2% to 60% since early May, while USDT and USDC dominance rose, signaling a shift to dollar-pegged stablecoins amid risk-off sentiment in crypto markets.
A market dynamic that characterized the steep bitcoin and crypto market selloff early this year is making a comeback: Traders are again preferring dollars over the largest cryptocurrency.
Bitcoin's dominance rate has pulled back to 60% from 61.20% since May 5, according to data from TradingView. At the same time, the dominance rate for Tether's USDT, the largest dollar-pegged stablecoin, increased from 7% to 7.5% while Circle Internet's USDC, the second-largest stablecoin, also saw its share rise. This shift indicates that traders are rotating capital out of bitcoin and into stablecoins, a classic risk-off move in crypto markets.
For cryptocurrency traders, the rising stablecoin dominance suggests a cautious sentiment prevailing in the market. When traders hold stablecoins instead of bitcoin, it often signals a lack of conviction in immediate upside for digital assets. This pattern was observed during the selloff earlier this year, and its recurrence may weigh on bitcoin's price in the near term. For current pricing context, traders can check NowPrice's crypto page for real-time data on bitcoin and major stablecoins.
Looking ahead, market participants will watch whether bitcoin dominance continues to decline or stabilizes. Key levels to monitor include the 60% threshold; a break below could signal further rotation into stablecoins. Additionally, macroeconomic factors such as Federal Reserve policy and U.S. Treasury yields may influence risk appetite. Traders should also keep an eye on stablecoin supply metrics, as an increase in USDT and USDC supply often precedes buying pressure when sentiment turns bullish.