· ·

Bitcoin Breaks Downtrend by Surging 10% to $6,700, is the Tether Sell-off a Factor?

Bitcoin Breaks Downtrend by Surging 10% to $6,700, is the Tether Sell-off a Factor?

Earlier today, on Oct. 15, the price of Bitcoin surged from $6,150 to $6,700 on most major fiat-to-cryptocurrency exchanges including Coinbase, Bitstamp, and Kraken.

Although the price of the dominant cryptocurrency surpassed the $7,500 mark on Bitfinex, the increase in the value of Bitcoin on Tether-enabled exchanges such as Bitfinex and OKEx were triggered by the sell-off and drop in the value of US dollar-backed stablecoin Tether (USDT).

Bitcoin surged to $6809 on Coinbase.

Tether Sell-Off, Bitcoin Surge

Throughout the past 48 hours, Tether experienced one of its largest sell-offs to date. The rapid drop in the value of USDT can be attributed to three major factors:

  1. Investors selling USDT for better stablecoins (audited, regulated) like Gemini USD and Pax
  2. Crypto traders selling USDT to buy Bitcoin and Ethereum.
  3. Tether banking issues as Alex Kruger explained as traders can’t redeem USDT

As BTC reached $7,500 on Bitfinex, the real price of Bitcoin on regulated fiat-to-cryptocurrency trading platforms rose to $6,700. However, contrary to popular belief, the organic rise in the price of Bitcoin over the last 12 hours was not triggered by Tether.

On cryptocurrency-only exchanges, BTC surged significantly from $6,150 to $7,500 because the value of Tether fell against the US dollar. But, on fiat-enabled exchanges, the drop in the price of USDT did not have any impact on the order books.

Hence, the significant premium of Bitcoin on Tether-enabled exchanges and the rise in the value of BTC on fiat-to-cryptocurrency trading platforms was merely a coincidence.

Previously, Danny Les, a respected cryptocurrency trader and head of blockchain innovation at Sync Money, said that a final shakeout will be in play before BTC initiates a serious mid-term rally:

“Personally I suspect that there will be more blood before any kind of serious rally up. Volume and price, certainly in Bitcoin’s case need to pick up before we get to near Christmas otherwise we will see the year out with a very negative sentiment attached.”

Given that BTC experienced a relatively large sell-off last week which led the price of BTC to dip below the $6,200 mark, it is possible that the asset could begin engaging in a major rally in the weeks to come.

Traders Positive

Bitcoin has broken out of its long-term downtrend resistance after surpassing $6,700. Although the market still needs to see BTC reaching the $6,800 resistance level in the next 24 to 48 hours to confirm a bullish short-term price movement, analysts have expressed their optimistic viewpoint on the short-term trend of the market.

Crypto Rand, a prominent technical analyst in the cryptocurrency space, stated:

Flood, another recognized cryptocurrency trader, emphasized that with record low volatility and two months of stability, BTC is likely to have hit its bottom.

Stability in Crypto Market Suggests Massive Accumulation by Institutional Investors
Related: Stability in Crypto Market Suggests Massive Accumulation by Institutional Investors

For many weeks, the cryptocurrency market has recorded low daily trading volumes and demonstrated a lack of trading activity in major markets including the US, Japan, and South Korea.

The volume of Bitcoin, Ethereum, and XRP has started to pick up on most cryptocurrency exchanges, and considering positive developments in the crypto and blockchain space, investors expect the market to initiate a promising short-term movement to the upside.

Bitcoin | BTC

Updated: Nov 7 at 2:53 am PDT
$6,625.19
4.95%

Bitcoin, currently ranked #1 by market cap, is up 4.95% over the past 24 hours. BTC has a market cap of $114.77B with a 24 hour volume of $6.11B.

Chart by CryptoCompare

Bitcoin is up 4.95% over the past 24 hours.

Cover Photo by Breno Machado on Unsplash

Posted In: , , Analysis, Price Watch, Stablecoins

Like what you see? Subscribe to CryptoSlate

Get our daily newsletter containing the top blockchain stories and crypto analysis straight to your inbox.

Sign up to stay informed
Joseph Young
Author

Joseph Young

Crypto Analyst @ CryptoSlate

Joseph Young is a finance and tech journalist. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.