While the crypto market has witnessed a modest bounce in Bitcoin and leading altcoins recently, stablecoin dominance continues to climb at a steady pace. Technical analyst MooninPapa highlights that the market share of USDT and USDC is rising rapidly, cautioning investors that it may be risky to assume a trend reversal prematurely.
Signs of weakness in Bitcoin resistance
On Thursday, Bitcoin approached its immediate resistance line, touching a high of $78,200 during the day. However, the price fell just short of this peak, leaving expectations unfulfilled. Even after back-to-back green candles, both the RSI and trading volume present a subdued picture. MooninPapa also stressed on X that the on-balance volume indicator remains under significant pressure.
Wednesday’s four-hour chart saw a TBT positive divergence signal, followed early Thursday by the closing of a TBO short signal. MooninPapa notes that while orange diamond signals carry more weight than positive divergences alone, readings on four-hour timeframes are six times weaker compared to daily charts.
For Ethereum, sell-side pressure dominates even more when compared to Bitcoin. Daily RSI hit a low of 20.24 on Tuesday, then rebounded to 27.18 at Wednesday’s close, technically signaling a possible recovery. A series of green triangles in the four-hour chart triggered a cluster of TBT positive divergences. Yet, the broader macro setup remains bearish, and the four-hour TBO breakdown is still relevant for now.
Mini glossary: TBO and TBT are proprietary algorithmic signals in technical analysis used to indicate trend reversals or momentum shifts. Orange diamonds or green triangles mark these on price charts, helping analysts anticipate possible breakout or reversal points in the market.
For Ethereum, the TBS support level surged from $1,847 to $2,103 in a short span. MooninPapa notes that such support jumps are common even during pronounced downtrends and do not alone confirm a bullish reversal.
Why stablecoin dominance matters
Both the USDT.D and USDC.D indexes posted two TBO long closings each on the four-hour chart. Stablecoin dominance has been pushing above the “cloud” for four straight days. According to MooninPapa, this increases the likelihood that dominance will remain elevated in the short term.
The critical threshold tracked is at or above 13 percent. From current levels, reaching this threshold would mean an increase of about 25 percent. At the end of January, a similar jump resulted in a 46 percent spike in stablecoin dominance over eight or nine days, during which Bitcoin saw a sharp price drop.
| Indicator | Trend | Critical Level |
|---|---|---|
| USDT.D & USDC.D | Rising | 13% and above |
| BTC.D | Falling | Unknown |
| OTHERS.D | New breakout | February 14 high |
As Bitcoin dominance continues to slip, the OTHERS.D index is gaining momentum and, with a TBO breakout, shows renewed energy. The last TBO breakout spotted by MooninPapa was on February 14, after which the market moved sideways for several weeks.
In low-cap coin groups like TOTALE50 and TOTALE100, a closing of short positions on the four-hour chart has been detected via the TBO indicator. While this could signal a localized reversal, broader market conditions remain unsupportive, prompting continued caution.
If stablecoin dominance reaches 10.6, 10.7, or 10.8 percent, MooninPapa warns this would likely intensify pressure on altcoins.
Coin performances and technical outlooks
ZEC rose 17 percent above resistance on Wednesday, but showed signs of fragility by Thursday. The $700 to $720 range is viewed as a short opportunity. NEAR, after a second TBO breakout, climbed 13 percent and then gained another 4.8 percent with its next target set at $3.12. LIT posted a 70 percent rally in just four days, but trading volume has started dropping since Friday.
SOL tested its fast resistance line Friday morning after a TBO short closing. Although a similar signal previously led to a 17 percent surge, this time such a move seems unlikely. The RSI indicator remains weak, prompting MooninPapa to scale up short positions as SOL approaches $95.
TAO could present a shorting opportunity if it nears its $305 resistance. FARTCOIN, after a 33 percent drop, is stabilizing at $0.17, with technicals pointing to possible oscillation in the $0.20-$0.22 range. HYPE rose 14 percent Thursday and 49 percent over five days to reach $62.65, with the RSI peaking at 86.16 for the rally. MooninPapa expects the surge could extend slightly, but has already begun opening short positions to manage risk.
LINK is showing positive technicals by forming higher daily lows and entering a second period of TBT positive divergence on the weekly chart. The last time this occurred, in October 2024, LINK gained 200 percent within 42 days. Still, MooninPapa remains cautious, noting a focus away from chasing long setups.
MORPHO jumped 5 percent above its resistance on Friday morning and saw an overall 18 percent rise in three days, with its RSI reaching 60.92. MooninPapa nevertheless shifted to short positions. Meanwhile, coins including XRP, ADA, ALGO, RENDER, JUP, MON, ZBCN, ONDO, VET, KAS, DASH, FIRO, ARRR, STABLE, H, and FF remain on the warning list, most displaying bearish or weak technicals.
MooninPapa called on investors to remain vigilant, noting that “if stablecoin dominance climbs above 13 percent, the market could see sharp moves and increased altcoin pressure, as has happened before.”
