Crypto Analyst Warns of Potential Bitcoin Plunge Based on Tether Dominance Chart
Crypto analyst and trader Justin Bennett believes that Bitcoin has not yet completed its correction. He points to the Tether dominance chart (USDT.D) as a bearish signal for Bitcoin. The USDT.D chart shows the proportion of the crypto market cap represented by stablecoin Tether (USDT). A rising USDT.D chart usually indicates traders selling their cryptocurrencies in favor of Tether.
Bennett predicts that the USDT.D chart will continue to climb after rebounding from a critical support level, suggesting a potential 20% drop for Bitcoin. According to him, this chart has been accurate since October. If the prediction holds true, Bitcoin could reach around $30,000.
Potential Relief Rally Before Downside Target
Despite Bitcoin’s recent rally to approximately $42,000, Bennett stands by his prediction. He suggests that Bitcoin may experience a relief rally up to $46,000 before dipping down to his downside target. He emphasizes the importance of reclaiming $41,240 for relief and filling the imbalance before further downward movement.
Monitoring the US Dollar Index for Bullish Reversal
Bennett is also closely monitoring the US dollar index (DXY), which measures the value of the US dollar against major currencies. He believes that the DXY is poised for a bullish reversal. A strong DXY implies investors shifting their funds into the US dollar and away from risk assets like Bitcoin. A sustained break above 104.20 in the coming weeks could further pressure risk assets.
Hot Take: Potential Double-Digit Plunge for Bitcoin?
Justin Bennett warns that based on the Tether dominance chart, Bitcoin could potentially experience a double-digit plunge. If the USDT.D chart continues to climb, as predicted, Bitcoin may drop by around 20%, reaching approximately $30,000. Despite Bitcoin’s recent rally, Bennett maintains his downside target and suggests a relief rally before the potential decline. Additionally, he points to the US dollar index (DXY), which could indicate a shift of funds from risk assets like Bitcoin to the US dollar. This analysis highlights the importance of monitoring these indicators for potential market movements.
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