- The 5.17% wick may mark the peak of dominance as a potential correction wave begins to form soon.
- Analysts are watching support between 4.80% and 4.40% where a new phase of market balance may start.
- Volume and momentum readings show traders preparing for a likely liquidity shift across Bitcoin and altcoins.
The latest four-hour chart of USDT dominance (USDT.D) shows a potential Elliott Wave C correction forming. The market cap dominance stands at 4.93%, gaining 4.92% in the past 24 hours. Analysts are closely tracking the structure as price action hints at a possible five-wave downward pattern developing.
A wick near the 5.17% zone has drawn attention, raising questions about whether it marked a local top or a liquidity trap. Volume spikes during that period indicate strong trader participation, suggesting exhaustion in buying momentum. Technical traders are interpreting this wick as a critical reversal signal that could define near-term market direction.
If the five-wave structure completes as expected, dominance could fall back toward the 4.60%–4.40% region, aligning with previous consolidation zones.
Elliott Wave Pattern Points to Deeper Correction
The chart shows a completed impulse sequence labeled (1) through (5), followed by a corrective phase labeled A-B-C. The “C” leg now appears to be unfolding in five internal waves, a classic sign of corrective continuation. The structure implies that USDT dominance could retreat before stabilizing again.
At wave (5)’s peak, the dominance touched 5.17%, just below the 0.786 Fibonacci retracement zone. This alignment strengthens the probability that the correction is unfolding as per the Elliott Wave framework.
Momentum indicators also align with the bearish projection. The stochastic oscillator shows downward crossover signals, reflecting weakening short-term momentum. Similarly, the moving averages have begun flattening, reinforcing the likelihood of consolidation or pullback.
The projected path suggests that USDT.D may retest its earlier support levels before resuming a potential recovery wave. However, traders remain cautious about whether the market will validate the five-wave completion or diverge into a complex corrective formation.
Volume Profile and Market Reaction
The volume profile shows a heavy concentration of trading between 4.80% and 5.00%, forming a clear value area. Below this zone, volume drops sharply, signaling thin liquidity layers. If USDT dominance falls beneath 4.80%, it may accelerate downward momentum until it reaches the 4.40% support range.
Market participants have pointed to the questioned wick as a potential deviation, noting that such anomalies often precede corrective extensions. This observation has gained traction among traders who expect a broader rebalancing between Bitcoin and altcoin liquidity.
The accompanying price behavior shows a transition from impulsive to corrective, with smaller retracements within each leg of the five-wave C pattern. The steep gradient on the third wave of the sequence further supports this transitional phase.
As dominance shifts, the broader crypto marke t often experiences liquidity redistribution. When USDT.D declines, it typically signals increased inflows into risk assets such as Bitcoin and major altcoins. This correlation underscores the importance of closely observing dominance shifts across shorter timeframes.
Market Outlook and Technical Confirmation
The projected decline toward the red support line could mark the conclusion of the corrective structure. Traders are eyeing this area as a potential accumulation zone, where dominance may stabilize before forming a new bullish base.
The moving average ribbons on the four-hour chart reveal that price is currently testing mid-level support. If the five-wave C structure completes, dominance could potentially rebound toward 4.90%–5.00%.
However, should selling pressure persist, dominance could break below its previous low near 4.50%, confirming a more extended correction. The stochastic oscillator’s position near oversold territory suggests limited downside room, yet confirmation through volume and candle closure remains crucial. The observed setup brings a pivotal question to the forefront: Will USDT dominance sustain above 4.80%, or will it confirm a deeper corrective phase toward 4.40%?
For traders, this structure serves as a crucial short-term signal for gauging liquidity shifts across the crypto market. While the analysis remains technically grounded, confirmation through price action in upcoming sessions will determine whether the projected five-wave completion materializes or extends further into November.
