I've noticed that many beginners misunderstand how market dominance works. They think that if USDT is sold, its share should decrease. But that's not quite right, and here's why.

The most important thing: dominance is recalculated every second automatically based on asset prices and their market capitalization. It's not an action, but a consequence. An increase in one dominance is math, not a direct transfer of money.

Here's a real example. Imagine a market valued at $1 trillion, where USDT accounts for $100 billion (10%). Then altcoins grow by $100 billion, and USDT stays the same. Now the total market cap is $1.1 trillion, but USDT is still $100 billion. But its share drops to 9.1%. See? USDT wasn't physically sold, but its dominance fell simply because the market grew faster than it.

Why does Tether.D fall during altcoin rallies? Because altcoins (especially small caps) give +10–30%, while BTC and ETH grow more slowly or stay flat. The total market capitalization increases, but the USDT capitalization doesn't change. The result — its share in the pie automatically decreases.

And why don't BTC.D and ETH.D increase during these times? Because big players already accumulated Bitcoin and Ethereum earlier. Now they are increasing their risk profile by reallocating their portfolios: reducing the share of stablecoins but not increasing the share of BTC and ETH. Instead, they pour into altcoins. In percentage terms, BTC and ETH don't lose market cap, but their market share doesn't grow because altcoins are rising faster. This results in a flat dominance.

How does this happen step-by-step? First, there's an accumulation phase: Tether.D is high, BTC.D and ETH.D are stable, and the market is waiting. Then a small part of USDT flows into promising altcoins, often through OTC and funds. BTC and ETH hardly move, but Other grows faster. Here, the small market cap effect kicks in: a small inflow of money into small-cap altcoins yields a large percentage growth. That's why dominance changes sharply without visible moves in Bitcoin and Ethereum.

Then retail investors see the altcoin rally and exit the market or move into stablecoins. BTC and ETH already seem psychologically expensive. Altcoin dominance continues to grow.

For trading, this means the following: healthy growth in Other.D looks like this: Tether.D falls, BTC.D and ETH.D are flat or decline, Other.D rises. This is the best window for altcoins. A risky signal is when Other.D grows, but Tether.D doesn't fall and total market cap doesn't increase. This is just money shifting within altcoins, and a pullback is soon.

The essence is this: dominance increases where market capitalization grows faster, not where "assets are bought directly." USDT may not be sold, BTC and ETH may stay still, but altcoin dominance will still grow. This is pure market math.