The price of bitcoin (BTC) bounced above $28,000 on May 12 after repeating a chart structure not seen since March 2020.
Loss spiral of BTC sellers
Data from Cointelegraph Markets Pro and TradingView continued to track the BTC/USD pair while briefly dipped to just under $24,000 on Bitstamp.
A sharp pullback sent the pair up several thousand dollars in a matter of minutes, and a consolidation took it to trade around USD 27,000.
The bounce zone was significant, constituting the so-called realized price of bitcoinwhich is the sum total of all unspent transaction outputs (UTXOs).
The last time the BTC/USD pair tested realized price was during the cross market crash due to COVID-19 in March 2020.
“Bitcoin basically kissed the realized price (of $24,000). BTC is cheap,” he pointed on Twitter CheckmatePrincipal Insights Analyst at on-chain analytics firm Glassnode.
Checkmate added that realized losses – investors selling BTC below its cost price – have also spiked to their second-highest daily level in history, at about $2 billion.
As Cointelegraph reported, liquidations had also surged over the previous 24 hours, topping $1.2 billion across the entire crypto space.
Tether is back in the spotlight
The other main topic of the day, stablecoins, began to divide opinion on the prospects of bitcoin.
When the largest stablecoin, Tether (USDT), saw its peg to the US dollar break, two camps emerged, one accusing Tether of malpractice and another hoping the peg would be restored soon. unlike the imploding US dollar stablecoin TerraUSD (UST).
“USDT dollar peg is already resetting which is a good sign”Cointelegraph contributor Michaël van de Poppe wrote in one of his many tweets of the day.
“People shouldn’t compare USDT to UST as they are completely different, although the reaction in the markets is due to tremendous levels of fear. It still looks like capitulation to me.”
The commentator WhalePanda delved into the sentiment, warning of “spike FUD” from what he and others called “Tether truthers.”
people confusing $USDT and $UST and panicking.
People don’t understand the difference between an under collaterized algorithmic stablecoin and a backed stablecoin.
panic dumping $USDT for $USDC and plain old $USD.Peak fud time.
Warning: this post will attract “Tether truthers”
— WhalePanda (@WhalePanda) May 12, 2022
People confuse USDT and UST and panic. People do not understand the difference between a low-collateralized algorithmic stablecoin and a backed stablecoin. People are panicking out of their USDT, going on to buy USDC and USD. It’s peak fud time. Warning: this post will attract “Tether truthers”.
USDT/USD is trading 2% below dollar parity at the time of writing this article.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.