Analysts are buzzing about what they see as potential missteps by the bears in the Bitcoin market in the ever-volatile world of cryptocurrency. According to some experts, such as Analyst Mags, a curious inverse correlation between USDT dominance and Bitcoin may be signalling a bullish turn for the leading cryptocurrency.
Examining the dominance chart, which tracks the percentage of the total cryptocurrency market capitalization that Bitcoin represents, analysts note a downward trend since Bitcoin’s recent low. Recently, this dominance broke below the 5% mark, suggesting a potential bearish signal. However, BTC itself tells a different story.
Despite a recent dip of around -19% from its recent highs, Bitcoin has closed one of its highest weekly candles and is now testing its previous all-time high. While some may interpret this as a bearish re-test, others see it as a bullish indicator, particularly given the cryptocurrency’s history of undergoing corrections of similar magnitude during its upward cycles.
Analyst Mags suggests that while there may be further downside potential, selling at this juncture could be premature. Should USDT dominance fail to hold its ground and Bitcoin maintain its current levels, the stage could be set for another upward surge in the near future.
Bitcoin Halving and Market Dynamics
Adding to the intrigue, Analyst Mags also commented on the current state of affairs surrounding the much-anticipated Bitcoin halving. Despite the anticipation surrounding the event, which historically has been associated with increased market volatility, recent market movements have left some scratching their heads.
Compared to the last halving event in 2016, Analyst Mags states that this recent drop in prices is just following a similar pattern that happened before the bull market started. The present look of the market reminds us of 2016, wherein there was a retracement followed by a sideways movement before continuing with the upward trend.
According to analyst Mags, investors should not be swayed by short-term changes, but rather, they should have a long-term perspective. Though it may appear ambiguous as things stand currently within the market space, from previous experience, Bitcoin generally has its true bull run some months after each halving event.
Related Reading | Why Ernst Young’s Shift To Ethereum Matters For Your Business