Crypto analyst and trader Justin Bennett is warning that one metric suggests Bitcoin (BTC) could suddenly head much lower.
Bennett tells his 110,800 followers on the social media platform X that Bitcoin’s market bottom may not have been reached yet based on the Tether dominance chart (USDT.D).
“The bottom is not in for BTC IMO (in my opinion). Maybe we see a mid $44,000 retest, but even markets like Tether dominance USDT.D are signaling another leg lower. This moves inversely to Bitcoin.”
Traders often keep an eye on the USDT.D chart as it shows how much of the crypto market cap is comprised of stablecoin Tether (USDT). A bullish USDT.D chart is traditionally interpreted as bearish for Bitcoin and other cryptocurrencies as it indicates traders are unloading their crypto holdings in favor of the stablecoin.
He previously said that based on the USDT.D chart, Bitcoin might retest the $30,000 level, a more than 30% decline from its current value.
“That’s what the Tether dominance USDT.D chart suggests. This moves inversely to Bitcoin, and the levels on this chart have been spot on since October. It would put BTC around $30,000. Let’s see.”
Bitcoin is trading for $43,126 at time of writing.
The trader is also keeping a close watch on the S&P 500 (SPX). According to the trader, the SPX may be a few points away from reaching a cycle top as it closely resembles the market structure of Bitcoin when BTC hit a peak in April 2021.
“SPX vs 2021-2022 BTC top. The moment of truth is coming up, and the 5,000 psychological number is less than 1% away. Not calling for a top, just sharing an observation.”
The SPX ended its trading week at 4,958 points.