- USDT saw a surge in activity following regulatory scrutiny.
- However, a common trading strategy that could have benefited BTC failed to materialize.
As a seasoned analyst with over two decades of experience navigating financial markets, I have witnessed my fair share of market manipulations and regulatory investigations. The recent surge in USDT activity following the latest Tether scrutiny is a situation I’ve seen play out before – albeit not always in the crypto space.
It appears that the U.S. administration is rumored to have initiated another probe concerning Tether (USDT), an action being labeled as the most recent instance of “FUD” related to Tether by some observers.
This occurrence seems suspicious to many, leading some to believe it might be a strategically planned move aimed at instilling panic in the market and triggering a sell-off, just before a possible surge in the value of Bitcoin [BTC].
Since more than three-quarters of all cryptocurrency transactions are linked to USDT pairings, analysts at AMBCrypto have issued a warning regarding the potential dangers associated with Tether’s high degree of centralization.
Any interruption in USDT might trigger ripples across the whole market, especially with Bitcoin approaching the climactic week of “Uptober” excitement.
USDT dominance hits new highs, but there’s a catch
Over the last seven days, the influence of USDT has been growing consistently, and it’s seen daily increases of more than 2%. Typically, an increase in USDT dominance tends to happen around the time Bitcoin is nearing its market peaks.
This was reminiscent of its previous close near $70K.
Nevertheless, the escalating interest in USDT, fueled by growing anxiety, has led to a substantial decrease in Bitcoin’s value, with it currently being traded at approximately $67,000.
This scenario highlights the increasing impact that USDT (Tether) has on the price movements of Bitcoin. Consequently, keeping a close eye on the repercussions of the current investigation involving Tether is essential.
It’s worth noting that as news spread during the later trading periods, there was a significant increase in USDT being transferred to exchanges, peaking at more than $2.3 billion over the past two months – a level not seen since then.
In spite of the recent surge, USDT’s influence stayed robust, registering an increase of approximately 3% day-on-day. This indicates that numerous traders viewed the news as overblown or deceptive, choosing instead to keep their overall purchases unchanged.
It’s quite likely that more U.S. Dollar Tether (USDT) will be deposited into exchanges than withdrawn in the near future.
If the present Bitcoin price happens to mark a market low point, it could entice substantial investment, possibly leading to an increase in its value.
Conversely, investors could potentially move their holdings towards other popular high-value alternative cryptocurrencies or meme coins, taking advantage of the chance to swap USDT for less expensive options instead.
In simple terms, the final week of October could see heightened crypto market action, as numerous digital currencies appear ready for a possible steep surge in value.
Odds of capital shifting into BTC
At the moment, USDT finds itself at a significant juncture. News of an ongoing investigation has stirred fear among investors, leading to intense selling activity. However, a bullish MACD crossover on the daily chart suggests that USDT could be strengthening its position.
Due to Bitcoin’s decline close to $67K, there is heightened discussion suggesting a possible drop to around $64K, a level that might mark the formation of the next support base in the market.
Regardless of the fact that it’s been twelve hours since the news was announced, usually causing investors to exchange USDT for BTC, the traders haven’t yet taken advantage of the lower prices (or swept the lows).
In this situation, it suggests that there might be a pullback coming up, which could make the present price not so attractive for entering the market.
Over the next seven days, Bitcoin’s future could be significantly impacted by the market’s response to USDT. At present, it seems that opportunities for a steep upward trend orchestrated by investors may not be abundant.
This could dampen the chances of the crypto market closing October on a bullish note.
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2024-10-26 15:04