Bitcoin (BTC) has seen a decline of 15% over the past week after reaching its record high of approximately $108,365, according to data from Bitstamp. The cryptocurrency may experience further decreases in the coming weeks due to an uptick in Tether market dominance.
USDT Dominance Signals ‘Huge Dump’ in Bitcoin Markets
TradingView contributor The ForexX Mindset suggests that Bitcoin’s price may witness a significant drop due to its negative correlation with the USDT Dominance Index (USDT.D), which measures Tether’s share in the overall cryptocurrency market.
The Negative Correlation Between Bitcoin and USDT Dominance
The USDT.D metric has shown signs of a substantial rebound after hitting support levels last seen in March. At that time, USDT.D recovered sharply from similar support near the 3.80% level, which coincided with Bitcoin reaching a local top of approximately $73,800.
The rebound suggested that traders shifted capital into Tether, likely anticipating increased market volatility or downside pressure. The ForexX Mindset believes similar Bitcoin declines are in the making, advising traders to ignore any short-term price gains.
"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, adding:
"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."
The Bearish Outlook: A ‘Modest Recovery’ Becomes an ‘Institutional Ambush’
The bearish outlook emerged as Bitcoin staged a modest recovery from its December low of approximately $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.’ 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, a classic signal of waning bullish momentum.
BTC/USD Weekly Price Chart
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.
A Record-High Target Predicted by Multiple Analysts
Meanwhile, 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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