The growing dominance of the stablecoin Tether in the crypto market could portend a significant correction in Bitcoin, according to a recognized expert on TradingView. This analysis comes as BTC struggles to maintain its bullish momentum after its recent all-time high of $108,365.
Tether’s dominance could rock Bitcoin
The ForexX Mindset, a recognized analyst on TradingView, published a detailed analysis on December 27 warning of a potential “bull trap”. The Tether Dominance Index (USDT.D) shows a significant rebound from its support at 3.80%, a level similar to that seen last March before a major bitcoin correction.
The analyst emphasizes that the recent bitcoin rebound towards $96,740 could constitute an “institutional ambush”. This strategy would see large market players artificially pushing prices higher to attract retail investors before a massive liquidation.
The bearish divergence identified on the weekly RSI, combined with bitcoin's failure to cross the 1.618 Fibonacci extension level near $102,734, reinforces this bearish scenario.
Price Targets and Short-Term Outlook
The first critical support level lies around $81,500, corresponding to the 20-week exponential moving average. If this support gives way, the next target would be the 50-week EMA at $67,700, coinciding with the 1.0 Fibonacci retracement level.
The flight of capital to USDT suggests an anticipation of increased volatility by traders. This behavior is reminiscent of similar patterns seen during previous major market corrections.
However, if bitcoin manages to turn the 1.618 Fibonacci line into support, a recovery could propel its price towards $150,000 by mid-2025, meeting the optimistic predictions of several major industry analysts.
Investors are therefore urged to exercise caution in the face of these bearish technical signals, despite the promising long-term outlook for bitcoin.
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