The Un-Tethering, massive premiums on USDT pairs VS USD
Back on October 4th, I wrote an article titled: Tether – It’s going to collapse. Mine is just one of many articles surrounding reviewing the wrongness of Tether and Bitfinex.
While doing a little bit of position trading and buying, the scuttlebutt surrounding last nights price movements were related to rumors that Bitfinex was insolvent and that Binance was removing Tether (USDT). None of those reports have been officially announced – but it didn’t stop Bitfinex and Binance to see a big drop in the Tether (USDT pair) and a massive drive up in all the pairs on those exchanges. At one point, there was a $500 difference between a regular US Dollar/Bitcoin pair than the Tether/Bitcoin pair. Even looking at the trading at the time of writing this article (1510 CST), there is a $300 premium between Bitfinex and Coinbase for Bitcoin (Bitcoin is trading at 6364 on Coinbase and 6717 on Bitfinex).
Why this is important.
I’ve mentioned this before, but this is a supremely important issue. Tether means nothing. You don’t know if Tether actually backed up by a US Dollar like respected and audited stable coins like TrueUSD, PAX, USDC, etc. With coins like TrueUSD, you actually have a right to a dollar. When I was reading some of the social media last night, there were a great many traders on Bitfinex and other exchanges that didn’t know what to do – they panicked did the only thing they could do to get rid of their Tether: buy Bitcoin, Ethereum and any other cryptocurrency. This caused a massive whipsaw in prices yesterday – with other exchanges experiencing a similar drive up in Bitcoin. I highly doubt this issue has been dealt with or is finished. While things have slowed down a little throughout the trading day, this Tether issue is far from over. It’s only a matter of time before this dominoes
We broke out of that triangle!
Now that’s a pretty sight – Bitcoin breaking the triangle very close to the apex. Could it travel back inside? Most certainly. On a faster time frame, we appear to be testing that initial breakout, but nonetheless, we appear to be closing at the downtrend line or above the downtrend line on the daily – with massive volume.
In another chart style, Point & Figure, we still remain in a much large triangle, which would require prices to breakout near the 7600 value area before breaking above this level.