The cryptocurrency market is currently experiencing a significant increase in the circulation of Tether (USDT). This surge has led to heightened attention on the Tether Dominance ratio (USDT.D) by investors in the crypto space.

USDT.D is a metric that measures the dominance of Tether relative to the overall market capitalization of cryptocurrencies. A decrease in USDT.D is often interpreted as a signal that investors are shifting their focus towards purchasing alternative coins and Bitcoin using USDT.

The market cap of Tether reached a record high of $145.6 billion in April 2025, marking an increase of over $8.5 billion since the beginning of the year. During April alone, Tether introduced more than $1.6 billion into circulation. The USDT.D figure serves as an indicator of the movement of capital into altcoins and Bitcoin based on Tether's market capitalization.

There has been a recent decline in USDT.D, leading to speculation about a potential market-wide recovery. Observations made by Max, the founder of BecauseBitcoin, pointed out a strong correlation between Bitcoin's price trends and the USDT Dominance Index. According to Max, whenever USDT.D declines, Bitcoin tends to experience a surge in price, and vice versa. Historical patterns suggest that Bitcoin may witness a price rally in the near future, while USDT Dominance might continue to decrease from the resistance level at approximately 5.5%.

Additionally, when considering the combined dominance of USDT.D and USDC.D, which represents the two largest stablecoins, positive signals have emerged. The combined index of USDT.D and USDC.D hit a crucial resistance level of 8%, signaling a potential uptrend for altcoins. This bullish indication suggests that capital might flow into altcoins, potentially prompting a significant price increase.

It is important to note that while stablecoin dominance shows promise, cautious optimism is advised by researchers from 10X Research, who highlight the need for careful consideration amid the current market recovery.