Tether Dominance (USDT.D) has reached a USDT dominance key resistance this November 5, 2025, following a notable 20% increase in October. This index, reflecting investor flight to stablecoins, is at an inflection point. The cryptocurrencies market is watching to see if a rejection will signal a recovery for Bitcoin and altcoins, or if a breakout will deepen the correction. The information comes from market technical analysis.
The USDT.D index experienced accelerated growth last month, reflecting a clear risk-off stance. Investors moved capital from volatile assets to the perceived safety of stablecoins. Now, the index is facing a long-term descending trendline. This barrier has historically capped USDT dominance rallies. A notable example was its coincidence with the market bottom during the FTX crisis in 2022.
USDT dominance functions as a vital liquidity indicator for the entire market. Mechanically, when USDT.D rises, it means capital is flowing out of assets like Bitcoin and altcoins. Investors prefer to hold cash (stablecoins). Conversely, when USDT.D falls, that capital flows back into risk assets. Typically, Bitcoin leads this recovery, closely followed by the altcoin market, which is much more sensitive to capital flows.
Does technical analysis confirm a bull trap for dominance?
Furthermore, technical analysts are divided on the next move. If the index breaks this resistance, the next primary target is set at 6.5%. This would signal further capital outflows and deeper price declines for risk assets. However, a bearish “head and shoulders” pattern is emerging on the 4-hour chart. This pattern suggests a potential short-term rally to 5.7% before a correction. This scenario points to a phase of high volatility and a struggle between fear and optimism.
There is a strong probability of a short-term rejection at the current resistance level. This would provide much-needed temporary relief for the altcoin market. If the USDT dominance key resistance holds firm, it could be the signal that Bitcoin is near its bottom. However, confirmation is needed. Investors should prioritize risk management. A steady decline in the dominance index will be the clear signal of liquidity returning to the crypto market.
