A Record High of $108,365 Established Before the Correction
According to data from Bitstamp, Bitcoin has experienced a significant decline of approximately 15% within the past week. This downturn occurred after the cryptocurrency established its record high of around $108,365. The current price of Bitcoin is significantly lower than its recent peak, with many market analysts predicting further decreases in the coming weeks.
Tether Dominance Signals ‘Huge Dump’ in Bitcoin Markets
The ForexX Mindset, a TradingView contributor, has observed that the Bitcoin price may witness a substantial decline due to its negative correlation with the USDT Dominance Index (USDT.D). This metric serves as an indicator of Tether’s share in the overall cryptocurrency market. Notably, the USDT.D index has displayed signs of a significant rebound after hitting support levels last seen in March.
Rebound from Similar Support Levels
The ForexX Mindset highlights that the rebound was characterized by a flight to safety, as traders shifted capital into Tether, likely anticipating increased market volatility or downside pressure. This trend suggests that investors are adopting a risk-averse approach by diversifying their portfolios with more stable assets like Tether.
A Sharply Recovering Tether Market Dominance
The USDT.D metric has shown a notable increase in recent weeks, reaching levels not seen since the beginning of 2022. This upward trend is indicative of a recovery in the market dominance of Tether. However, this development also raises concerns among traders and investors about potential consequences for Bitcoin’s price.
Ignoring Short-Term Price Gains
The ForexX Mindset cautions against interpreting short-term price gains as an indication of an imminent market upswing. Instead, the analyst advises traders to remain cautious and vigilant due to the possibility of a ‘huge dump’ in the near future.
"We’ll probably see a sharp spike in price — that’s the pump — which might fool people into thinking the market is about to take off," the analyst said. "But don’t trust it. This is a trap. Right after that spike, a huge dump is coming, and anyone who jumps in too soon could get wiped out."
Institutional Ambush
The bearish outlook emerges as Bitcoin staged a modest recovery from its December low of about $92,120. By Dec. 27, the BTC/USD pair had climbed to a high near $96,740. However, according to the ForexX Mindset, this recovery could create an ‘institutional ambush.’
Dark Pools and Whales
The analyst warns that dark pools and whales may deliberately pump Bitcoin prices to attract retail traders, only to offload their holdings at local highs, leaving smaller investors to shoulder considerable losses.
Bitcoin Bears Eye $81,500 in January
Bitcoin is experiencing a correction after failing to break above the 1.618 Fibonacci extension level near $102,734. The pullback comes as the weekly relative strength index (RSI) enters overbought territory while showing bearish divergence with respect to its prices forming higher highs.
Downside Targets for Bitcoin
Currently trading near $96,000, Bitcoin’s next downside target could be the 20-week exponential moving average (EMA) around $81,500 if the correction deepens. A further decline could see Bitcoin retesting the 50-week EMA near $67,700, which aligns with the 1.0 Fibonacci retracement level.
Potential Price Rally
Claiming the 1.618 Fib line as support could enable a Bitcoin price rally toward $150,000 by the first half of 2025, a record-high target predicted earlier by multiple analysts.
Investment Advice and Risk Considerations
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. Investing in cryptocurrencies carries significant risks, including market volatility and potential losses.
Stay Informed with Our Markets Outlook Newsletter
Critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every Monday.
Subscribe by clicking the link below:
[Insert link to subscription form]
By subscribing, you agree to our Terms of Service and Privacy Policy.