Bitcoin’s surge roped in by Tether fraud charges; fear still reigning over greed
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Bitcoin surged back into business today on the strength of the Amazon crypto payment rumours and a possible short squeeze, finally cracking the US$40K mark for the first time in several weeks.
It was a day of comebacks, with higher levels of volume and volatility returning, giving Bitcoin some of its trademark rollercoaster action.
— $ir ₿ud Fox (@1billiondollarz) July 26, 2021
Meanwhile, some analysts put the price surge down to retail traders new to the space getting absolutely “rekt” on bearish trades, thus contributing to “squeeze” the price higher.
$1b of BTC futures liquidations in the last 12 hours.
Here's where the carnage happened.
— Willy Woo (@woonomic) July 26, 2021
And then, just to add to the drama, Tether FUD popped its ugly head in for a bit of a laugh, too.
It might turn out to be a bit more than FUD this time, but then again, Tether (USDT) has proven remarkably resilient in the past. Bloomberg broke the story in the early hours of the morning (AEST) that the US Department of Justice is investigating the most widely used stablecoin and its issuers for possible past offences pertaining to bank fraud.
The federal prosecutors are looking into the early days of USDT, when it’s alleged Tether executives hid crypto transactions from various banks.
Tether, and its partnered exchange Bitfinex, has fought off similar allegations before, earlier this year settling an investigation by the New York Attorney General’s Office into whether it had covered up the loss of about US$1 billion in customer funds.
Perhaps the sooner other stablecoin options grow in popularity and usage the better, although regulatory uncertainty around stablecoins is a narrative that’s consistently bubbling under the surface at present. It’ll be interesting to see if the market can shrug off this news in the short term, at least.
Worried about Tether FUD?
— Dan Held (@danheld) July 26, 2021
For the moment, Fear. Although at least it’s up from Extreme Fear. But what does Warren Buffet say about being fearful? Even legendary investors should probably be taken with a grain of salt. Especially when we apply their maxims to crypto.
This popular crypto market sentiment indicator is only updated once every 24 hours, so we might take a look at it again tomorrow, as things may have changed given the price action over the past day.
It’s not a bad indicator to check in with, but when the market’s been down for some time, it can be a bit like looking at the weather forecast when sideways, sheeting rain is lashing your window.
The indicator is based on the Fear & Greed Index created by CNN, which is often used by and referred to by stock market watchers. The daily rating for the crypto version is put together from a pool of information including: market volatility, trading volume, social media sentiment, Bitcoin dominance and Google search trends.
In particular, when volatility’s high and trading volume is low (which it has been lately – very low), then the needle will most like be pointing in the fear territory, although the other factors play their part, too.
At the time of writing, the entire cryptocurrency market cap is up 7.5% in the past 24 hours at US$1.54 trillion. Bitcoin is changing hands for US$37,700, having dipped considerably again in the past half hour.
Ethereum and the altcoins were enjoying Bitcoin’s wake today, with ETH currently 5% in the green, at $US2,259. Most top 10 coins, including Cardano (ADA), XRP, Dogecoin (DOGE) and Polkadot (DOT) were sitting just around double digit percentage gains at one point in the past 24 hours, but all dipping at present, too.
Some of the other best performing altcoins today included: AMP, THORChain (despite recent protocol exploits), VeChain, Polygon and Synthetix.
Axie Infinity appears to have had a classic blow-off top, after another few days of pumpage into the weekend. In the past 24 hours, it’s down 9.53%, at US$36.55 – quite a bit lower from its very recent all-time high of US$49.20.