Crypto analyst and trader Justin Bennett warns that Bitcoin (BTC) has likely not yet seen the final stages of its correction.
Bennett tells According to its 110,800 followers on social media platform X, the Tether dominance chart (USDT.D) is bearish for Bitcoin.
Traders often keep an eye on the USDT.D chart as it shows how much of the crypto market cap is made up of stablecoin Tether (USDT). A bullish USDT.D chart is traditionally interpreted as bearish for Bitcoin and other cryptocurrencies, as it indicates traders are shedding their crypto holdings in favor of the stablecoin.
Bennett predicts USDT.D to move higher after a recovery from a critical support level.
“Another 20% lower for BTC from current levels?
That’s what the USDT.D chart with Tether dominance suggests. This moves inversely to Bitcoin, and the levels on this chart have been exactly the same since October. It would put BTC around $30,000. Let’s see.”
Him too say that his prediction holds despite Bitcoin’s latest rally to around $42,000. He suggests Bitcoin could stage a relief rally to around $46,000 before falling to its downside target.
“We continue to stick to the same BTC plan since the January 12 sell-off. The key to relief was/is a recovery of $41,240.
Fill the imbalance before lowering it.
Let’s see.”
Bitcoin is trading at $41,851 at the time of writing, up more than 4% in the past 24 hours.
Bennett too to hold we closely monitor 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 appears poised for a bullish reversal.
“DXY is still moving and I am still optimistic, 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 turn the recent trend from bearish to bullish and put pressure on risky assets such as stocks and crypto.
Disability for a sustained break below 102.60.”
A strong DXY suggests that investors are moving their money into the US dollar and away from risky assets like Bitcoin.
At the time of writing, the DXY is trading at 103.47.
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