Bitcoin (BTC) broke out of its long-term trading range on May 12, as ongoing selling pressure pulled markets back to 2020 levels.
Tether falters as UST holds below $0.60
The data from Cointelegraph Markets Pro and TradingView they followed the BTC/USD pair as it broke out of the range it had traded in since the start of 2021.
At the time of writing this article, the pair hovered around $26,700 on Bitstamp, its lowest since Dec. 28, 2020.
The weakness occurred when The fallout from the collapse of the Terra stablecoin continued to reverberate across the crypto space and beyond. There were even rumors that professional funds were experiencing solvency problems due to the losses at LUNA.
“People are still processing this but this is the Lehman moment for crypto”
Hearing about a lot of funds possibly insolvent from Luna meltdown
— Frank Chaparro (@fintechfrank) May 12, 2022
“People are still processing this, but this is Lehman’s moment for the crypto space.” I heard that a lot of funds are possibly insolvent due to the Luna crash.
LUNA, Tether’s in-house token, had all but capitulated in value at the time of writing, trading around $0.22. In early May, LUNA/USD was trading at $80.
The price of UST, that currently in the crosshairs of Terra executives committed to re-pegging the US dollar, it hovered around $0.60, still far from $1, but more than double the record lows for the week.
However, the tension was becoming more and more visible in the cryptocurrency space, as The largest stablecoin, Tether (USDT) began to give worrying signs that it was copying the fall of UST.
At the time of writing this article, The USDT/USD pair was trading below $0.99 on major exchanges.
Commenting on system stability, Tether CTO Paolo Ardoino said that USDT withdrawals were proceeding as normal.
“Less than 300 million were redeemed in the last 24 hours without a drop of sweat,” read part of a tweet.
Data from the on-chain analysis company CryptoQuant add that there have been record outflows of stablecoins on major exchanges.
USD 1,220 million settled in 24 hours
On the subject of the loss of the minimum macro range created in January 2021, analysts were still willing to see current levels as a potential opportunity.
“Anything lost in a macro downtrend will be recovered in multiples in a macro uptrend. The thing to do is pay attention to the markets when they are ultra bearish.”, plot the popular trader Rekt Capital.
An earlier tweet on May 11 highlighted the macro range.
If #BTC loses this green area as support…
— Rekt Capital (@rektcapital) May 11, 2022
If BTC loses this green zone as support… That will be confirmation that BTC will enter a multi-month downtrend.
The magnitude of the losses was reflected in the market liquidations. Data from the on-chain monitoring resource Coinglass showed that, for bitcoin and altcoins combined, these surpassed $1.2 billion in the 24 hours up to the time of writing.
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