A 15% Weekly Decline After Establishing a Record High
According to data from Bitstamp, Bitcoin has declined by 15% after establishing its record high of around $108,365. This downturn may lead to further price drops in the coming weeks due to a sharp recovery in Tether market dominance.
USDT.D vs. BTC/USD Weekly Performance Chart
Source: TradingView
Negative Correlation Between Bitcoin and USDT Dominance Index
A TradingView contributor, The ForexX Mindset, suggests that the Bitcoin price may witness a ‘huge dump’ due to its negative correlation with the USDT Dominance Index (USDT.D), a measure of Tether’s share in the overall cryptocurrency market. This correlation is evident as the USDT.D metric shows signs of a significant rebound after hitting support levels last seen in March.
BTC/USD and USDT.D Weekly Performance Comparison
Source: The ForexX Mindset
Rebound Suggests Flight to Safety
The rebound suggests that traders shifted capital into Tether, likely anticipating increased market volatility or downside pressure. This flight to safety may indicate a correction in the Bitcoin price.
A Bearish Outlook Emerges
As Bitcoin staged a modest recovery from its December low of about $92,120, a bearish outlook emerged. According to The ForexX Mindset, this recovery could create an ‘institutional ambush.’ 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.
A Correction in Progress
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, a classic signal of waning bullish momentum.
BTC/USD Weekly Price Chart
Source: TradingView
Potential Downside Targets
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 Upside Targets
Meanwhil,e 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.
Disclaimer
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.
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