Forex Analysis & Reviews: 29.06.2021 - BITCOIN: Is the fear of...

29.06.2021 06:21 PM

BITCOIN: Is the fear of market collapse gone?

After a series of days in the red, the cryptocurrency market revived a little, the recovery of positions in Bitcoin and Altcoin is observed with a fairly good progression. Perhaps this is since the first cryptocurrency weighed well below the $30,000 mark on June 22nd.

In simple words, the level of $30,000 was not broken by sellers, and market participants saw only a local breakdown of such an important level in the market.

The fear of a collapse was exaggerated, this is the opinion of most traders, but did all the fears rolled back? It is impossible to answer this question unequivocally, since the negative information background associated with China, and what we wrote in the previous article is still observed in the market.

Today, I have two interesting topics to think about, this is not an insider, but only a professional observation.

Topic #1 - Fear of the Tether stablecoin

Tether (USDT) is a cryptocurrency issued by Tether Limited, which guarantees that the value of USDT is backed by 20 percent of the US dollar reserves held in their bank accounts.

1 USDT = 1 USD

In a recent interview with Yahoo Finance, the president of the Federal Reserve Bank of Boston, Eric Rosengren, revealed his position on the Tether cryptocurrency, considering it a destroyer of financial stability.

"We have to take seriously the question of what happens when people run out of these instruments (stablecoins) very quickly," said Eric Rosengren in an interview.

His fears did not arise out of nowhere, the correspondence of the Chief Financial Officer of Tether about the investigation into USDT got into the open access, in which he argues that if Tether explodes, BTC at this moment can locally fall below the $1,000 mark. This will be a disaster for the entire crypto industry.

It should be understood that the cryptocurrency market is highly dependent on USDT for the reason that almost half of the trades and almost all cryptocurrencies trade in pairs with USDT, while 1 USDT is positioned as a real $1, no one knows the real security except the issuer of Tether. In the event of a disaster with USDT, there will be such a big wave that can carry hundreds of billions of dollars on its way.

Topic #2 - a record inflow of USDT

Last Friday (June 25), a record inflow of USDT was recorded on cryptocurrency exchanges. In numerical terms, this is about $3 billion relative to one day, this is a huge amount, and the question arises: why did this happen?

You will not find a definite answer, since the information is closed, there is only an assumption that the market is preparing for something.

It is worth recalling that the last time a similar influx of USDT was observed at the time of the news that Tesla had bought Bitcoin on its balance.

Why so many USDT were driven to the exchange this time is still unclear, but it is worth preparing for something strong enough on the market.

What is happening on the Bitcoin chart?

The quotes of the first cryptocurrency bounced off the support level in the face of the value of $30,000, gaining about 16% in weight (+$5,000). It may seem that the price change is quite large, but it is not so, we are still following within the boundaries of the side channel of $30,000 / $41,500.

In simple words, although the quotes move along a wide amplitude, it still stands in one place, where most traders are waiting for a breakdown of a particular border. This step will indicate the subsequent course in the market in the prospect of a new decline or a long-awaited market recovery.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.