Bitcoin (BTC), the largest cryptocurrency by market capitalization, closed January above the $40,000 threshold, signaling positive price action. However, market expert Justin Bennett suggests that Bitcoin’s bottom has yet to be reached.
Bennett’s analysis highlights the possibility of further price declines, with Tether’s stablecoin USDT dominance (USDT.D) chart indicating potential downward movements.
Tether Dominance Signals Concerns For BTC’s Price
Bitcoin’s recent price recovery and ability to surpass the $40,000 level have provided optimism among investors. Nevertheless, Bennett believes further price declines could follow a retest of the mid $44,000 range.
Bennett highlights the inverse relationship between Tether dominance and Bitcoin. According to his analysis, the levels on the Tether dominance chart since October have been reliable indicators for Bitcoin’s price movements.
According to Bennett’s analysis, as depicted in the chart above, Tether’s dominance may experience a potential increase from its current level of 6%. This increase could bring it closer to the 8% mark.
In such a scenario, Bitcoin’s performance would likely move in the opposite direction, indicating potential price declines soon.
On January 25, Bennett suggested that Bitcoin could drop another 20% from its current levels, which would place it around $30,000. If this scenario plays out, it would be crucial for Bitcoin bulls to defend the $30,000 level to maintain the current bullish structure.
A drop below $29,000 would give bears a stronger position, with only three major support lines remaining at $28,400, $25,900, and $24,000 before a potential retest of the $20,000 mark.
The performance of these support levels and Bitcoin’s ability to withstand increased selling pressure will be key factors to monitor. The future market sentiment will also play a significant role in determining Bitcoin’s price trajectory.
Bitcoin Witnesses Stellar Accumulation Trend
Despite the possibility of further price drops, renowned crypto analyst Ali Martinez has shed light on a notable trend in BTC’s recent accumulation streak by investors.
According to Ali Martinez’s analysis, Bitcoin is experiencing a significant accumulation streak, rivaling some of the most notable periods observed over the past few years.
The Accumulation Trend Score, a metric that gauges the buying activity of larger entities, has remained consistently high, hovering near 1 for the past four months.
This suggests that influential market participants are actively accumulating Bitcoin, signaling their confidence in the long-term potential of the cryptocurrency.
Martinez’s observations further indicate that Bitcoin’s price range around $42,560 has emerged as a highly significant interest zone.
Within this range, an impressive total of 912,626 BTC has been transacted. This is expected to be a significant support level, potentially preventing further downside movements and fostering increased buying interest.
These trends collectively contribute to a positive market outlook, suggesting that despite potential price drops, Bitcoin remains an attractive asset for long-term investment.
Featured image from Shutterstock, chart from TradingView.com