In this post:
- The price of Bitcoin (BTC) was impacted by the Tether revelation, which was quickly written off as unimportant.
- Within an hour, lengthy liquidations took place, releasing accumulated leveraged holdings in anticipation of a possible new surge.
- Tether emphasized that company had a history of cooperating with law authorities and denied any misconduct with AML procedures.
At a time when Bitcoin (BTC) and Ethereum (ETH) were seeing their highest levels of open interest, the announcement of a second possible probe into Tether, Inc. triggered yet another market-wide fall. While USDT dropped little lower to $0.99, within its typical range of volatility, the majority of coins and tokens fell.
The cryptocurrency market is constantly impacted by the hot topic of Tether, Inc. At the slightest mention of FUD, the fate of the most liquid and abundant stablecoin has the power to influence all values. The market crashed as a result of the news of a new inquiry, pushing Bitcoin (BTC) below $67,000.
The most popular stablecoins, USDT and USDC, both fluctuated within their typical range and reached $0.99. After the initial plunge, altcoins and tokens immediately began to rise again after losing less than 5%.
For Bitcoin, long liquidations quickly accelerated, targeting the accumulated liquidity. The accumulation of liquidity at $67,000, which had been weighing on Bitcoin over the previous day, was erased by the downward price movement.
The market’s early response prolonged the liquidations from the previous day. Following the revelation, up to $1 billion in open interest in Bitcoin was erased, and the market capitalization of the cryptocurrency fell by around $5 billion in less than an hour.
However, several of the assets soon recovered from the lows since the market had sufficient upward momentum. After dipping around $66,000, Bitcoin rose to nearly $66,700 in a matter of minutes. Ethereum dropped to $2,461.41 and appears ready to rise again.
Even if the market effect was deliberate, traders generally dismissed the new Tether FUD as a trivial incident. Despite the concerns, USDT has been used by the cryptocurrency market for over ten years with very few instances of de-pegging. The Tether announcement was even viewed by traders as a final attempt at a shakedown prior to a fresh rise.
When the Tether news broke, Bitcoin was sitting on accumulated long positions and was attempting to decide on a course. As However, several of the assets soon recovered from the lows since the market had sufficient upward momentum. After dipping around $66,000, Bitcoin rose to nearly $66,700 in a matter of minutes. Ethereum dropped to $2,461.41 and appears ready to rise again.
Even if the market effect was deliberate, traders generally dismissed the new Tether FUD as a trivial incident. Despite the concerns, USDT has been used by the cryptocurrency market for over ten years with very few instances of de-pegging. The Tether announcement was even viewed by traders as a final attempt at a shakedown prior to a fresh rise.
When the Tether news broke, Bitcoin was sitting on accumulated long positions and was attempting to decide on a course. As However, several of the assets soon recovered from the lows since the market had sufficient upward momentum. After dipping around $66,000, Bitcoin rose to nearly $66,700 in a matter of minutes. Ethereum dropped to $2,461.41 and appears ready to rise again.
Even if the market effect was deliberate, traders generally dismissed the new Tether FUD as a trivial incident. Despite the concerns, USDT has been used by the cryptocurrency market for over ten years with very few instances of de-pegging. The Tether announcement was even viewed by traders as a final attempt at a shakedown prior to a fresh rise.
When the Tether news broke, Bitcoin was sitting on accumulated long positions and was attempting to decide on a course. As those positions were cleared, there is now a smaller risk that whales or traders will try to push BTC down.
Deconstructing the long positions also increases the likelihood of a Bitcoin rally over the weekend. Accumulated long positions were flushed within an hour, which corresponded with the expiration of options. Although some traders thought the Tether FUD was intended to halt the Bitcoin rally, it might instead have the opposite impact because long holdings are no longer vulnerable to attack.
DeFi on Solana was impacted by the abrupt market shift and Tether FUD. In the minutes following the market meltdown, a number of transactions involving the Raydium concentrated liquidity pair failed. Not all swaps are completing since the liquidity pool is provided with varying quantities of USDT and USDC. All transactions failed for a short time, some because of a lack of liquidity. But the impact on DeFi might be minimal.
Ethereum-based Liquidations at these price points do not pose a danger to DeFi because all protocols maintain sound collateral.
Disregarded as noise is Tether FUD.
Some people believe that the Tether story is just false information, which has helped the market get rid of some of its bloated liquidity. The news will hasten market movements before the monthly options expiration of Bitcoin. According to Paolo Ardoino, CEO of Tether, the lawsuit news was merely a fresh round of false information, but it was enough to cause a nervous market to respond.
Tether continues to operate and inject new USDT despite having already withstood a lawsuit and a thorough investigation by the New York Attorney General. The issuer of the stablecoin has made an effort to comply with investigations and has done so in circumstances of fraud and theft.
Tether also verifies its user accounts, but holding the tokens is still anonymous and permissionless. Not all wallets are vetted, and USDT is used on multiple networks with no oversight. Tether mentioned the news of AML’s non-compliance goes against its track record of complying with authorities in tracking bad actors.
