Bitcoin has declined by 15% a week after establishing its record high of around $108,365, according to data from Bitstamp. The cryptocurrency may fall further in the coming weeks due to a sharply recovering Tether market dominance.
USDT.D versus BTC/USD weekly performance chart. Source: TradingView
Tether dominance signals “huge dump” in Bitcoin markets
According to TradingView contributor, The ForexX Mindset, the Bitcoin (BTC) price may witness a “huge dump” due to its negative correlation with the USDT Dominance Index (USDT.D), a measure of Tether’s (USDT) share in the overall cryptocurrency market.
Notably, the USDT.D metric shows signs of a significant rebound after hitting support levels last seen in March. At that time, USDT.D rebounded sharply from similar support near the 3.80% level, which coincided with Bitcoin reaching a local top of around $73,800.
BTC/USD and USDT.D weekly performance comparison. Source: The ForexX Mindset
The rebound suggested a flight to safety as traders shifted capital into Tether, likely anticipating increased market volatility or downside pressure. The ForexX Mindset sees similar Bitcoin declines in the making, asking 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 emerged as Bitcoin staged a modest recovery from its December low of about $92,120. By Dec. 27, the BTC/USD pair had climbed to a high near $96,740.
Related: BTC could rebound in ‘coming days’ as metric signals growing buy pressure
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. Source: TradingView
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.
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.
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.