Crypto analyst and trader Justin Bennett is warning that Bitcoin (BTC) has likely not yet seen the final stages of its correction.
Bennett tells his 110,800 followers on the social media platform X that the Tether dominance chart (USDT.D) is flashing bearish for Bitcoin.
Traders often keep an eye on the USDT.D chart as it shows how much of the crypto market cap is comprised of stablecoin Tether (USDT). A bullish USDT.D chart is traditionally interpreted as bearish for Bitcoin and other cryptocurrencies as it indicates traders are unloading their crypto holdings in favor of the stablecoin.
Bennett predicts that USDT.D will climb higher after bouncing from a critical support level.
“Another 20% lower for BTC from current levels?
That’s what the Tether dominance USDT.D chart suggests. This moves inversely to Bitcoin, and the levels on this chart have been spot on since October. It would put BTC around $30,000. Let’s see.”
He also says that his prediction stands despite Bitcoin’s latest rally to around $42,000. He suggests Bitcoin could have a relief rally to as high as around $46,000 before dipping down to his downside target.
“Sticking with the same BTC plan since the January 12th selloff. The key for relief was/is a $41,240 reclaim.
Fill the imbalance before lower.
Let’s see.”
Bitcoin is trading for $41,851 at time of writing, up more than 4% in the last 24 hours.
Bennett is also keeping a close eye on the US dollar index (DXY), a measure of the value of the US dollar against a basket of six major currencies.
According to Bennett, the DXY looks primed for a bullish reversal.
“DXY is still coiling, and I’m still bullish as I have been since January 2nd. 103.50 and 104.20 are resistance. A sustained break above 104.20 in the coming weeks would flip the recent trend from bearish to bullish and put pressure on risk assets like stocks and crypto.
Invalidation on a sustained break below 102.60.”
A strong DXY suggests that investors are moving their money into the US dollar and away from risk assets like Bitcoin.
At time of writing, the DXY is trading at 103.47.
Generated Image: DALLE3
Credit: Source link
