Cryptocurrency Market Goes Wild While ‘Stablecoin’ Tether Loses Value

The entire cryptocurrency market is trading in a sea of green today with Bitcoin (BTC) marking a daily high of more than 10 percent. With just a handful of altcoins decreasing in value, stablecoin Tether (USDT), drops down by more than 3 percent.

Serious and Sudden Gains

The cryptocurrency market rallied today as it gained over $20 billion in less than two hours. Bitcoin (BTC) led the spike, marking an increase of about 10 percent. And while the cryptocurrency experienced a serious pullback, at the time of writing this it is still trading at $6,653.13 which is an increase of over 5 percent in the last 24 hours according to data from CoinMarketCap.

All of the top 20 digital currencies were trading in the green today, offering a nice change of pace to the otherwise stagnant market.

In fact, as Live Bitcoin News reported recently, Bitcoin has been trading in a tight range of $732 which marked the lowest point of its volatility for the last 17 months – a signed of maturity for some, and boredom for others.

‘Stablecoin’ Tether (USDT) Not so Stable

‘Stablecoin’ Tether (USDT) Not so Stable

Despite the positive trading sentiments of today, the US Dollar-pegged Tether (USDT) marked a decrease which completely undermines its sole purpose. In other words, Tether failed to do the one thing that it was meant to do – to remain stable.

At the time of writing this, the ‘stablecoin’ is trading at $0.96 which is more than 2 percent less than a dollar – the price the digital currency is supposed to permanently hold. Prices had dipped even lower overnight, falling as low as $0.92 before rising to its current price.

Just a few days ago, the fourth largest cryptocurrency exchange by means of traded volume – Bitfinex – halted its fiat deposits. At roughly the same time, it was also reported that some $110 million worth of USDT left the exchange on October 10th. Bitfinex came up with an official announcement on October 15th, outlining that all fiat deposits were now processing as usual and that they “have been temporarily paused for certain user groups.”

Do you think there is a relation between the most recent price rally and the unusual activity of Bitfinex? Let us know in the comments below!

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Crypto Market Keeps Its Balance After Recent Sell-Off, Bitcoin Above $6,300

Sunday, October 14: crypto markets keep their balance after the recent sell-off this week, with most of the 20 top coins by market cap slightly in the green. Fluctuations on the markets in both directions have for the most part been no more than 1 percent, as data from Coin360 shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) has seen slight growth over the past 24 hours, having strengthened to above the $6,300 threshold. At press time, the major cryptocurrency is trading at $6,331, slightly down from its intraday high around $6,360, while recovering from its intraday low around $6,277. On the week, Bitcoin is down almost 4 percent from around $6,580.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

Ethereum (ETH) has also seen a slight rebound, up around half a percent over the past 24 hours to press time. The second cryptocurrency by market cap has been hovering just above the $200 price point in the second half of the day, and is trading at $202 at press time. In terms of weekly dynamics, Ethereum is down about 11 percent to press time.

Ethereum 24-hour price chart

Ethereum 24-hour price chart. Source: Cointelegraph Ethereum Price Index

Total market capitalization of all cryptocurrencies is hovering around the $200 billion threshold, appearing to stabilize after the crypto markets’ recent decline. At press time, total market cap amounts to $202.8 billion, slightly down from $204 billion earlier today.

Total market capitalization 24-hour chart. Source: CoinMarketCap

Bitcoin dominance — or the percentage of the total crypto market cap that is Bitcoin’s — has been steadily near 54 percent today. At press time, Bitcoin dominance is at 54.1 percent.

Among the top 20 cryptocurrencies by market cap, TRON (TRX), the eleventh largest, has seen the most notable change over the past 24 hours to press time, up a solid 3.66 percent.

TRON continues to see gains today following a recent cryptic announcement from its CEO of a partnership with an unnamed “industry giant” that is valued at “tens of billions of dollars.” Following the tweet an unconfirmed report was released claiming that TRON has partnered with China’s Internet giant Baidu.

Crypto analyst Joseph Young commented on Twitter today expressing concern about Bitcoin’s trading volumes, claiming they are “approaching yearly low once again” and adding “Decent short-term recovery earlier today (October 14) but low volume is really concerning.”

Young has also participated in an ongoing Twitter battle recently between the crypto community and American economist Nouriel Roubini, who has been posting particularly audacious anti-crypto Tweets — most recently calling the whole idea of crypto “fascist at core.”

The crypto commentator today retorted a recent Tweet from Roubini about Bitcoin transaction fees that claimed “the cost per transaction of bitcoin is literally $60.” Young clarified for Roubini that “cost per transaction” is in fact different from “transaction fee.”

Roubini — a New York University professor also known as “Dr. Doom” for reportedly predicting the 2008 financial crisis — recently testified in a U.S. Senate hearing on cryptocurrency.

Bitcoin Price Analysis: Bulls Defend Yearly Support Amidst Wall Street Slump

As Bitcoin price moves towards the second weekly close of October, we recap what happened during the week and look at the bullish versus bearish case for the number one cryptocurrency.

1 Day chart  

Bitcoin price 00 has spent most of October in a tight range oscillating between lows of $6400 and highs of $6,650 as it continued a slow grind towards the horizontal resistance, which has capped the cryptocurrency’s price since January 2018.

Price action continued to respect this range until Wednesday the 10th where Bitcoin began a sharp decline of around 8% from $6,600 which lasted two days, testing yearly support at lows of $6,051.

This decline coincided with a large sell-off in stock markets across the world, which was largely sparked by a recent spike above 3.25% in the yield on 10-year US Treasury note for the first time since 2011. The significance meaning that the cost of borrowing would increase and negatively impact consumer spending and corporate investment, which would ultimately reduce the output of the listed companies.

This is the second wobble in the stock market during 2018, the first of which came at the end of January, which also seemingly sparked a large decline for Bitcoin, although back in January the decline represented a 40% reduction from around $11,000.

One important thing to note here is that Bitcoin behaved in a similar risk off way as other equities.  Bitcoin, while aspiring to be a safe haven asset, actually behaved as a speculative asset and did not receive the appreciation seen in traditional flight-to-safety commodities Gold and Silver.

While some significant ground was lost, Bitcoin did not slide into the $5,000s or lower, which certainly would have occurred earlier in the year.  This may be indicative that Bitcoin is relatively close to the bottom, but its future price action will be at the mercy of the wider economic environment.

Therefore the first couple of days trading on Wall Street is likely to influence the directional bias for Bitcoin price.

Weekend Appreciation

Bitcoin found temporary support at $6,051 on Thursday and the bears have failed to push lower, with price looking to be ranging within the 23.6% retracement of decline at around $6,200.  Over Saturday night, the bulls broke out of what looked like a bear flag and pushed up to the 50% retracement at $6,355, before being sharply rejected.

The bears will be looking to capitalize on the rejection and look to realize the AB=CD or bear flag target which would see prices reaching for the lowest range of yearly support at $5,800

Weekly Chart

The weekly chart shows that the Bulls really have one objective for the final day of this week.  Price must remain above $6150 to avoid the lowest weekly close of 201,8 which has held since June.

This would only provide temporary relief for the bulls who then need to push price over $6400 to avoid the same on the monthly chart.

With this in mind and with the bears continuing to push Bitcoin back to its support we can take a look at other sentiment indicators to see if there are any clues about underlying strength or weakness for the bulls and bears.

There is generally a growing fear endemic in the Bitcoin community, with unclear market events such as USD tether trading at a discount and weakening buyer action at support.  An attempt to measure this is made by the Crypto Fear and Greed index, which uses various weighted inputs to deliver an index which shows sentient. Last week, this reached out to yearly lows and it was quite prevalent on Twitter, with many believing $6,000 would not hold.

Looking at this as a chart, it would indicate that if past history were an indicator, that many contrarians may view this fear as a buying opportunity.

Mounting Shorts 

Margin Short positions margin shared by Bitfinex are over 35k, reaching for all-time highs and suggest that traders are confident betting on betting on lower prices.  Historically there has been an inverse relationship between mounting short positions and future price action.

We can see where the short positions were built and are therefore exposed, but a high number of short positions does not necessarily imply higher prices. Almost half of all short positions are built from a base of $8,500 with the rest being deep in profit from around $14k.

Clearly, these positions will need to be closed at some point, but with a short squeeze being some 30% above current price action, it feels a long way off and it may be that the closing will occur if sub $6,000 prices are realized by the bears.

Around 75% of the remaining Long positions are from lower prices. It is likely that a break below $5,800 will trigger the stop loss positions of some longs, but most of the leveraged long positions have already been cleared out.

So despite weekly support holding once again for Bitcoin, we approach a critical week, the outcome of which may ultimately be ruled by Wall Street.

For the bulls this week must close above $6150 as a short-term objective, but $6400 must be reclaimed by the close of the month.

Is the writing on the wall for the Bulls?  Will next week bring lower prices, or are the Bulls happy to continue absorbing selling pressure at $6,000? Let us know your thoughts below!

Disclaimer:  The views expressed in this article are the personal opinion of the author and do not reflect the views of Bitcoinist. The information in the article should not be taken as financial advice.]

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