Cryptocurrency analyst and trader Justin Bennett is warning of a Bitcoin (BTC) correction after a massive uptrend.
Bennett tells his 110,700 followers on the social media platform X that a bearish trend reversal may be forming for Bitcoin that could send it down to the $38,000 level.
“Not a great look for BTC while below $43,300. Possible lower high [price] forming and starting to weigh on trend line support. The next stop is $38,000 on a sustained break.”
Bennett has been drawing attention to bearish Bitcoin signals all week.
The trader is also keeping a close watch on the USDT dominance chart (USD.T), which tracks how much of the crypto market capitalization belongs to USDT. Bennett predicts that USDT.D will climb higher as it reaches a critical support level, which is another bearish indicator for the markets as it suggests that traders may unload their crypto holdings in favor of the stablecoin.
“Tether dominance USDT.D – which moves inversely to Bitcoin – telegraphed the recent pullback perfectly. Tested and swept the August 2022 low before bouncing. I’m still eyeing channel support just below that mark, which could mean one more higher high for BTC before a more significant pullback.”
He also says that the total market cap of digital assets (TOTAL) appears to have run up against resistance, signaling downward pressure for Bitcoin.
“Looks like the crypto market found selling pressure right where we thought it might. TOTAL $1.6 trillion-$1.7 trillion was/is the resistance area to watch. Early signs of a local top here.”
Lastly, Bennett warns that if Bitcoin loses support at $38,000 the next line of support is at $32,000.
“Long overdue pullback for BTC. Possible range developing here going into this week’s FOMC (Federal Open Market Committee). I’m still open to a $48,000 retest before a more significant correction, but $37,800 will be critical. Lose that on the HTFs (high time frames) and we likely see $32,000. We’ll see.”
Bitcoin is trading for $42,181 at time of writing, down 1.7% in the past 24 hours.
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