Bitcoin analyst warns of ‘big mess’ in recovering stablecoin dominance

According to data from Bitstamp, bitcoin is down 15% for the week since hitting a record high of around $108,365. The cryptocurrency is likely to fall further in the coming weeks due to the dominance of the Tether market, which is recovering sharply.

The dominance of Tether shows a “big mess” in the Bitcoin markets

According to TradingView contributor, The ForexX Mindset, the price of Bitcoin (BTC) could witness a “big dip” due to its negative correlation with the USDT Dominance Index (USDT.D). Market.

Notably, the USDT.D index is showing significant signs of recovery, hitting support levels seen at the end of March. During that time, USDT.D rebounded sharply from similar support near the 3.80% level, which coincided with Bitcoin reaching a high near $73,800.

The rebound suggests a flight to safety as traders shift capital into Tether, possibly anticipating increased market volatility or pressure. The ForexX Mindset sees a similar fallout from Bitcoin, asking traders to ignore any short-term price gains.

“We'll probably see a price increase – that's the pump – that could trick people into thinking the market is going to pick up,” the analyst said.

But don't believe it. This is a trap. After that commotion, a huge dump is coming, and anyone who jumps in too soon is likely to perish.

Bitcoin looked bearish as it staged a modest recovery around $92,120 in December. On December 27, the BTC/USD pair reached a high near $96,740.

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However, according to ForexX Mindset, this recovery could create an “institutional hide.”

The analyst warns that dark pools and whales may deliberately increase the price of Bitcoin to attract retail traders, but to bring down their holdings at local highs, leaving small investors to suffer huge losses.

Bitcoin saw $81,500 in January.

Bitcoin is facing a correction after failing to break above the 1.618 Fibonacci extension level near $102,734.

The reversal comes when the weekly Relative Strength Index (RSI) enters overbought territory and is showing a bearish divergence, indicating that the price is at a higher level and that the momentum is slowing down.

Currently trading around $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 retest the 50-week EMA near $67,700, which is in line with the 1.0 Fibonacci retracement level.

Meanwhile, finding the 1.618 Fib line as support could enable Bitcoin's price rally to $150,000 in the first half of 2025, which is the high target previously predicted by many analysts.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.