Bitcoin Closes January Above $40,000, But Expert Warns of Further Price Declines
Bitcoin, the largest cryptocurrency by market capitalization, ended January on a positive note by surpassing the $40,000 mark. However, market expert Justin Bennett believes that Bitcoin has not yet reached its bottom and further price declines may be on the horizon.
Tether Dominance Raises Concerns for Bitcoin’s Price
Bennett’s analysis highlights the potential downward movements in Bitcoin’s price based on Tether’s stablecoin dominance (USDT.D) chart. He points out that there is an inverse relationship between Tether dominance and Bitcoin’s price, with Tether dominance levels since October serving as reliable indicators for Bitcoin’s price movements.
According to Bennett’s analysis, there is a possibility of an increase in Tether dominance from its current level of 6% to around 8%. In such a scenario, Bitcoin’s performance would likely move in the opposite direction, indicating potential price declines.
Bitcoin Accumulation Trend Signals Confidence Among Investors
Despite the potential for further price drops, renowned crypto analyst Ali Martinez has observed a significant accumulation streak in Bitcoin. The Accumulation Trend Score, which measures buying activity by larger entities, has remained consistently high over the past four months. This suggests that influential market participants are actively accumulating Bitcoin and have confidence in its long-term potential.
Martinez’s analysis also indicates that the price range around $42,560 has become a highly significant interest zone for Bitcoin. Within this range, a total of 912,626 BTC has been transacted, potentially acting as a strong support level and attracting increased buying interest.
Hot Take: Despite Potential Price Drops, Bitcoin Remains Attractive for Long-Term Investment
While market experts warn of potential price declines in Bitcoin, the positive accumulation trend and the confidence shown by influential investors indicate that Bitcoin remains an attractive asset for long-term investment. It is important to monitor the performance of support levels and market sentiment to gauge Bitcoin’s price trajectory in the future.
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