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, pointing to potential further price declines in the near future. Bennett’s analysis highlights the possibility of downward movements, with Tether’s stablecoin USDT dominance (USDT.D) chart indicating concerns for BTC’s price.
Tether Dominance Signals Concerns For BTC’s Price
While Bitcoin’s recent price recovery and ability to surpass the $40,000 level have provided optimism among investors, Bennett believes further price declines could follow a retest of the mid $44,000 range. Notably, Bennett highlights the inverse relationship between Tether dominance and Bitcoin, indicating that the levels on the Tether dominance chart since October have been reliable indicators for Bitcoin’s price movements. According to Bennett’s analysis, Tether’s dominance may experience a potential increase from its current level of 6% to closer to the 8% mark, potentially leading to price declines for Bitcoin.
On January 25, Bennett suggested that Bitcoin could drop another 20% from its current levels, potentially reaching $30,000. It would be crucial for Bitcoin bulls to defend the $30,000 level to maintain the current bullish structure, as 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. Monitoring the performance of these support levels and Bitcoin’s ability to withstand increased selling pressure will be key factors in determining its price trajectory.
Bitcoin Witnesses Stellar Accumulation Trend
Despite the possibility of further price drops, renowned crypto analyst Ali Martinez has highlighted a notable trend in BTC’s recent accumulation streak by investors. According to 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, nearing 1 for the past four months, signaling confidence in the long-term potential of the cryptocurrency.
Additionally, Martinez’s observations indicate that Bitcoin’s price range around $42,560 has emerged as a highly significant interest zone, with an impressive total of 912,626 BTC transacted within this range. This is expected to act as a significant support level, potentially preventing further downside movements and fostering increased buying interest.
These insights collectively contribute to a positive market outlook, suggesting that despite potential price drops, Bitcoin remains an attractive asset for long-term investment. It’s essential for investors and market participants to stay informed about these trends and key support levels to make informed decisions in the crypto market.
