Crypto Analyst Warns of Potential Bitcoin Downtrend Based on Tether Dominance
Crypto analyst and trader Justin Bennett is cautioning that a key metric indicates Bitcoin (BTC) could experience a significant drop in price.
Bennett shares his insight with his large following on the social media platform X, stating that Bitcoin may not have reached its market bottom yet, as indicated by the Tether dominance chart (USDT.D).
Traders often monitor the USDT.D chart, which shows the proportion of the crypto market cap made up of stablecoin Tether (USDT). A bullish USDT.D chart typically suggests a bearish trend for Bitcoin and other cryptocurrencies, indicating that traders are selling their crypto assets in favor of stablecoins.
In a previous tweet, Bennett suggested that based on the USDT.D chart, Bitcoin could retest the $30,000 level, representing a more than 30% decline from its current value.
At present, Bitcoin is trading at $43,126.
Watching the S&P 500
Bennett is also closely monitoring the S&P 500 (SPX). He believes it may be nearing a cycle top, drawing similarities to Bitcoin’s market structure when it reached its peak in April 2021.
The SPX closed the week at 4,958 points.
Hot Take: Bitcoin’s Potential Downtrend
Crypto analyst Justin Bennett warns that a metric suggests Bitcoin could face further downside. The Tether dominance chart (USDT.D) indicates that Bitcoin’s market bottom may not have been reached yet. The USDT.D chart is used by traders to track the percentage of the crypto market cap comprised of stablecoin Tether. A bullish USDT.D chart is often interpreted as bearish for Bitcoin, indicating a trend of traders selling their crypto holdings in favor of stablecoins. Based on the USDT.D chart, Bennett suggests that Bitcoin could retest the $30,000 level. He also notes similarities between the market structure of the S&P 500 and Bitcoin’s previous peak, hinting at a potential cycle top for the S&P 500.
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