Bitcoin Price Analysis–Oct 16
Trust and viability questions around the world’s most liquid stable coin have been hovering for sometimes now. After their Q1 DoJ subpoenas to those questioning USD-Tether reserves, USDT coin issuers had to patch broken trust. But, after rumors of being delisted by Binance to those of insolvency at Noble bank, USDT price collapse led to an inevitable capital flight pumping Bitcoin and other coins.
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Volatility is back. As a result, it’s likely that the debacle in USDT prices would yank BTC from bears if we base our view on yesterday’s 10 percent surge. At some point, BTC prices traded above the all-important $7,200 and even testing $7,800 before slowing down. Regardless of price spikes, a standout and an important indicator for a resurgent market is the ballooning level of market participation reversing losses and dwarfing trading volumes of Oct 11. That is a mark of bulls and traders could end up benefiting from this unexpected change of fortune.
Well, rumor has it that the banking problem around USDT-USD reserve volumes is the source of this meltdown. As visible from statistics, USDT which is the most liquid coin in the space and a safe haven for crypto traders seeking to shield from the wild volatility common with crypto assets didn’t handle the huge sell-off on their order books. Within hours, USDT prices sunk from 97 cents to 93 cents. The result was immediate.
BTC prices bolted from $6,200 triggering a capital flight from USDT which is slowly but surely losing credibility from investors.
But, this is not the first time questions about the Tether reserve is popping. Earlier, findings showed that Tether was used to pump BTC prices because there was a rather direct relationship between USDT mints and the spike of BTC during last year’s BTC supper rally.
Bitcoin Price Analysis
As USDT sink, Bitcoin prices are exploding and closing above key resistance lines at the back of strong volumes. From our previous Bitcoin price analysis, our trading plan depended on break out velocity and the breath of trading range.
Well, what we have is a classic break out from around the apex of a wedge in the weekly chart. Not only are our bulls valid but from the chart, prices are now trading above the main resistance trend line of the last eight months or so.
Therefore, we recommend traders to load up at spot rates in lower time frames with first targets at $8,500 and later $12,000.
On to the daily chart and yesterday’s 10 percent surge meant aggressive traders were stopped out thanks to BTC bulls rallying above Oct 11 highs.
Besides the surge in trade volumes, notice that prices are finding support from around the two months support trend line, a level of importance in our analysis.
Because prices are now trading above the lower limit of our resistance zone, we recommend buying on dips in lower time frames as we trade with the newfound momentum. As such, ideal stops would be at $6,500 while first bull targets would be at $8,500.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.Leave a comment