A closely watched crypto analyst warns that Bitcoin (BTC) is not approved to take off despite rallying above $68,000.
Crypto strategist Justin Bennett tells his 133,400 followers on social media platform X that Bitcoin is sending mixed signals as BTC threatens to soar to new all-time highs.
While the price of BTC is rising, Bennett says warns that the rally may not be sustainable as it is fueled by speculators amid weak market volume.
“People are celebrating a breakout of Bitcoin within a seven-month range on a Friday (low volume) before the day or week has even ended, within a rally largely driven by perpetual futures and OI (open interest) coming back up is the highlight. peak at the end of July.
I’m not going to make any bold predictions because the data is conflicting at the moment, but if you’re a trader, there’s absolutely nothing wrong with being cautious.”
Open interest is a measure that tracks the total number of outstanding derivative contracts for a given asset. A rising OI puts a bullish asset in a position to witness a leverage flush where over-indebted traders are wiped out, leading to a deeper corrective move.
According to Bennett, BTC bulls need to hold $68,200 to avoid a possible correction.
“It’s been a strange week, to be honest.
On the one hand, whales remain stable compared to retail.
On the other hand, spot traders have not participated much since Monday. It was mainly a rally driven by perpetrators, which is generally not healthy.
We’ll see how this all plays out, but how BTC responds to $68,200 is the more immediate focus rather than the conflicting data.”
At the time of writing, Bitcoin is trading at $68,241.
Looking at USDT dominance (USDT.D), Bennett notes that the chart has recently fallen below two support levels. USDT.D tracks how much of the crypto market capitalization belongs to the top stablecoin USDT. A bearish USDT.D chart is traditionally interpreted as bullish for Bitcoin and altcoins, as it suggests traders are using their stablecoins to accumulate crypto assets.
Says Bennett,
“The dominance of Tether, which moves inversely to Bitcoin, is following well.
Currently just below a confluence of support of 5.26%.
A sustained breakout would expose the recent lows and possibly the 2018 trend line.
That could mean a 20% rally against BTC, give or take.”
At the time of writing, USDT.D is hovering at 5.24%, still below the trader’s support areas.
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