What to know:

Tether’s dominance in the cryptocurrency market has risen sharply, reaching its highest level since April, underscoring the risk aversion in the broader crypto market.

Tether is the world's largest dollar-pegged stablecoin, trading at a market capitalization of $184 billion at press time. While the stablecoin is widely used to fund crypto purchases and for lending and borrowing activities, it's also a dollar equivalent within the crypto market, serving as a preferred store of value during turbulent times.

In other words, investors tend to park money in USDT and other dollar-pegged stablecoins when the market wilts. And the crypto market has been under pressure lately, with market leader bitcoin losing 11% this month to $97,630.

Historically, bear markets have been marked by sharp increases in tether dominance, as traders seek to preserve capital. The onset of these bear markets often coincides with renewed bullish momentum in USDT dominance, as reflected by the MACD histogram's crossover above the zero line (below left).