Bitcoin is down more this week after Terra’s devastating stablecoin fiasco and the depletion of its backing Luna token.
After trading under $30,000, Bitcoin is presenting the bulls with some consternation, and discouraging information.
“When Blockchain protocol Terra’s LUNA and TerraUSD (UST) tokens imploded, their decline ricocheted throughout crypto markets and Bitcoin was, naturally, no exception,” reports William Suberg at Cointelegraph. “After dipping to near its realized price just below $24,000, BTC/USD staged something of a V-shaped recovery to bounce past $31,000 in the following few days. That strength, however, now appears limited, as $30,000 proves to be a stubborn level to win over for good. While the picture looks decidedly more reassuring than that of some altcoins, traders are keeping away from any firmly bullish price takes. BB also mentions longer red candlesticks for seven full weeks, which is unprecedented in Bitcoin’s history.”
However, Suberg also mentions the possibility of a “relief bounce” for BTC. Suberg cites a Twitter account, Income Sharks, as remarking with spirit on a possible response by hodlers, quoting:
“Just as us bulls fought the trend for the past few weeks, I think bears about to deny or refuse any more upside.”
“If your (sic) a scalper this will be heaven for you over the next few days,” tweets Crypto Tony. “This for me is the best case scenario on #Bitcoin due to the rejection and 3 wave confirmation. We either drop to new lows from here, or we complete the C wave flat then pump once more.”
That said, the Federal Reserve may raise rates, and the World Economic Forum is coming up.
The dollar index is high, and although Tether is recovering from its 5% de-pegging, in synchronicity with the UST crash, there is some legitimate speculation on whether stablecoins will continue to be depressed in value for several reasons, not least of which is that the SEC has them in their sights.
Watch the market carefully.