15.02.2025 10:17

Crypto analyst Justin Bennett highlights a significant hurdle Bitcoin bulls currently face, emphasizing one key factor that could dictate BTC's trajectory. Bennett, addressing his substantial X following, points to the Tether dominance chart (USDT.D) as a bearish indicator for Bitcoin. This metric, closely monitored by traders, reveals the proportion of the total cryptocurrency market capitalization held by the stablecoin USDT. A rising USDT.D is typically interpreted as a bearish signal for Bitcoin and other cryptocurrencies, suggesting traders are exiting their crypto positions and seeking refuge in the stability of USDT.

According to Bennett's analysis, the challenge for Bitcoin bulls lies in the fact that Tether dominance has remained above its previous range highs since February 5th, now testing this level as potential new support. He argues that a drop in USDT.D back within its previous range on higher timeframes would signal a bullish crypto market. Conversely, if USDT.D holds strong, he anticipates sideways or even downward movement for Bitcoin, Ethereum, and other cryptocurrencies. Bennett emphasizes that his approach isn't about prediction, but rather about reacting to market developments.

Shifting his focus to specific levels, Bennett states that he will only adopt a bullish stance on Bitcoin if USDT.D breaks below the 4.37% support level. He reiterates his cautious approach to the crypto market since early February, acknowledging the possibility of short squeezes but maintaining that there's still insufficient justification for bullish sentiment on BTC or ETH until that 4.37% level gives way.

At the time of writing, USDT.D sits at 4.47%, indicating that Bennett's identified support level is holding firm. Interestingly, Bennett also suggests that Bitcoin might be preparing for a short squeeze, a scenario where traders betting against the asset's price are forced to buy back their borrowed holdings to cover their positions, potentially driving the price upwards.