A popular crypto strategist says a chart could portend 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 about to breach 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 capitalization is made up of stablecoin Tether (USDT). A bearish USDT.D chart is traditionally interpreted as bullish for Bitcoin and crypto because it indicates traders are divesting from their stablecoins to take risk.
“The most bullish signal right now for crypto is the Tether dominance chart, in my opinion.
This moves in reverse to crypto and is currently down.
Unconfirmed at this time. The weekly close will be the key.
At the time of writing, the USDT.D chart stands at 6.88%, below Bennett’s trendline by around 7%.
As the USDT.D chart shows signs of a potential end to its one-year uptrend, Bennett says Bitcoin is in a position to rally towards its target of $26,000 by December.
“A spike of $26,000 BTC is still on the table…
However, some things need to happen, including Bitcoin breaking above $22,800 and the DXY (US Dollar Index) closing below 109.30. [points] next week, among others.
There are no easy tasks here.
At the time of writing, Bitcoin is changing hands for $21,211, fixed on the day.
Bennett also explains why he thinks the 109.30 level for the DXY could be the key to a sustained crypto rally.
“I cannot stress enough how important 109.30 is for the DXY next week.
The confluence there is massive.
2022 trend line, support for descending channels and key monthly level.
Close below = extended crypto rally.
Bouncing aggressively = crypto withdrawal.
Similar to the USDT.D metric, traders also follow the performance of the DXY as a plummeting index suggests investors are leaving the safety of the US dollar to accumulate risky assets like Bitcoin and crypto.
At the time of writing, the DXY is at 110.78 points.
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Feature image: Shutterstock/Tithi Luadthong