A Record High Crumbles
Bitcoin (BTC) has taken a significant hit, plummeting by 15% in the past week after reaching an all-time high of approximately $108,365, according to data from Bitstamp. The cryptocurrency market may witness further declines in the coming weeks due to a resurgence in Tether’s market dominance.
The ForexX Mindset’s Bearish Outlook
According to TradingView contributor The ForexX Mindset, Bitcoin’s price may experience a "huge dump" due to its negative correlation with the USDT Dominance Index (USDT.D), which measures Tether’s share in the overall cryptocurrency market. Notably, the USDT.D metric has shown signs of a significant rebound after hitting support levels last seen in March.
A Similar Rebound in March: What Does it Mean?
The rebound suggests a flight to safety as traders shifted capital into Tether, likely anticipating increased market volatility or downside pressure. This phenomenon was also observed in March when USDT.D rebounded sharply from similar support near the 3.80% level, coinciding with Bitcoin reaching a local top of around $73,800.
BTC/USD and USDT.D Weekly Performance Comparison
As seen in the chart below, there is a clear negative correlation between Bitcoin’s price and Tether’s market dominance:
USDT.D vs BTC/USD weekly performance chart
A "Trap" for Retail Traders?
The ForexX Mindset warns that dark pools and whales may deliberately pump Bitcoin prices to attract retail traders, only to offload their holdings at local highs. This strategy could leave smaller investors with significant losses.
Will the Correction Deepen?
Bitcoin is currently trading near $96,000 and has failed to break above the 1.618 Fibonacci extension level of around $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.
BTC/USD Weekly Price Chart
USDT.D vs BTC/USD weekly performance chart
Possible Downside Targets: $81,500 and Beyond?
If the correction deepens, Bitcoin’s next downside target could be the 20-week exponential moving average (EMA) around $81,500. A further decline could see Bitcoin retesting the 50-week EMA near $67,700, which aligns with the 1.0 Fibonacci retracement level.
A Potential Rally to $150,000?
However, 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.
Important Note: No Investment Advice or Recommendations
This article is for educational purposes only and 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.
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