A popular crypto strategist says that one chart could foreshadow bullish continuations for Bitcoin (BTC) and the rest of the crypto markets.
Analyst Justin Bennett tells his 110,600 Twitter followers that the Tether dominance chart (USDT.D) is on the verge of violating the diagonal support that has kept the metric in an uptrend since November 2021.
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 bearish USDT.D chart is traditionally interpreted as bullish for Bitcoin and crypto as it indicates that traders are parting with their stablecoins to take risk.
Says Bennett,
“The most bullish signal right now for crypto is the Tether dominance chart, in my opinion.
This moves inversely to crypto and is currently breaking down.
Unconfirmed as of now. Weekly close will be key.”
At time of writing, the USDT.D chart stands at 6.88%, below Bennett’s trendline of around 7%.
As the USDT.D chart flash signs of potentially ending its one-year uptrend, Bennett says Bitcoin is in a position to rally toward his target of $26,000 by December.
“A $26,000 BTC peak is still on the table…
However, a few things need to occur, including Bitcoin getting above $22,800 and the DXY (US dollar index) closing below 109.30 [points] next week, among other things.
There are no easy tasks here.”
At time of writing, Bitcoin is changing hands for $21,211, flat on the day.
Bennett also explains why he believes the 109.30 level for the DXY could be key for a sustained crypto rally.
“I can’t stress enough how significant 109.30 will be for the DXY next week.
The confluence there is massive.
2022 trend line, descending channel support, and key monthly level.
Close below = extended crypto rally.
Bounce aggressively = crypto pullback.”
Similar to the USDT.D metric, traders also track the performance of the DXY as a plummeting index suggests that investors are leaving the safety of the US dollar to accumulate risk assets like Bitcoin and crypto.
At time of writing, the DXY is at 110.78 points.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Tithi Luadthong