Bitcoin Hits Record High, Then Crashes 15% in a Week
After reaching an all-time high of around $108,365, according to data from Bitstamp, the price of Bitcoin has declined by approximately 15% over the past week. This significant drop is attributed to several factors, including the resurgence of Tether market dominance.
Understanding the USDT Dominance Index (USDT.D)
The ForexX Mindset contributor has highlighted the critical role of the USDT Dominance Index (USDT.D) in predicting potential price movements for Bitcoin. The metric measures Tether’s share in the overall cryptocurrency market, and its recent rebound suggests a significant shift in investor sentiment.
A Brief History of USDT.D
As seen on the USDT.D versus BTC/USD weekly performance chart, the index shows signs of a sharp recovery after hitting support levels last seen in March. At that time, USDT.D rebounded from similar support near the 3.80% level, coinciding with Bitcoin reaching a local top of around $73,800.
| Date | Price | USDT.D |
|————-|————–|—————-|
| Mar 2022 | $73,800 | 3.80% |
| Dec 2022 | $92,120 | 4.50% |
| Jan 2023 | $96,740 | 5.20% |
The Bearish Outlook: A "Huge Dump" Looms
The ForexX Mindset contributor warns that the recent Bitcoin price gains may be a trap for unsuspecting investors. According to the analyst:
"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… 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."
Institutional Ambush: A Deliberate Price Pump?
The analyst’s bearish outlook suggests that dark pools and whales may be deliberately pumping Bitcoin prices to attract retail traders. Once these investors have committed their funds, the whales may offload their holdings at local highs, leaving smaller investors to shoulder significant losses.
Bitcoin’s Correction: A Technical Analysis
As seen on the BTC/USD weekly price chart, 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.
| Price | RSI |
|——-|——-|
| $92,120 | 60 |
| $96,740 | 75 |
Potential Downside Targets for Bitcoin
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 may see Bitcoin retesting the 50-week EMA near $67,700, which aligns with the 1.0 Fibonacci retracement level.
A Potential Rally to $150,000?
On the other hand, claiming the 1.618 Fib line as support could enable a Bitcoin price rally toward $150,000 by the first half of 2025. This record-high target has been predicted earlier by multiple analysts.
Investment Advice: Conduct Your Own Research
Every investment and trading move involves risk, and readers should conduct their own research when making a decision. This article is for informational purposes only and does not contain investment advice or recommendations.
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Related Articles:
- BTC could rebound in ‘coming days’ as metric signals growing buy pressure
- Bitcoin price faces significant resistance near $102,734
- Tether’s market dominance reaches new highs
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