Over the weekend, Bitcoin crashed hard, going as low as $7,685, a level last seen in early January. Bitcoin has lost 27% of its value since 2020 high of about $10,500 on Feb. 13.
Altcoins followed Bitcoin but this time, altcoins are not experiencing as much pain as the world’s leading cryptocurrency. Cryptocurrencies have started to stabilize since yesterday’s sell-off.
Amidst this bloodbath, Tether Treasury printed yet another batch of 60 million USDT worth just over $60 million.
Yet again, Bitfinex and Tether CTO, Paolo Ardoino stated, “Inventory replenish. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests.”
Just four days back on March 5th, Tether had minted $60 million worth of USDT and before that, on February, 24, $60 million USDT were minted.
Just like many other times since February, these USDTs are to replenish inventory which is depleting fast. Also, a huge amount of USDT has been regularly sent to exchanges, particularly to Binance and Huobi, as per the data shared by WhaleAlert.
Crypto enthusiasts are excited about this expecting a jump in BTC price but it’s hard to know if any considerable positive movement would be seen in BTC price which has been acting as a risk-on asset for the past three weeks along with the stock market.
As trader Crypto Squeeze notes, “If you think Bitcoin is having a bad day, have a look at the crude oil price. It’s down by 30% today alone. And 54% since Jan 2020,” points out.
Until this weekend, investors were fearful of the economic impact of coronavirus (covid-19). But now the oil price war has further given another big reason for the markets to crash.
The oil price war is started by OPEC and Russia that is expected to push crude into $20s. This price war could be worse than the Nov. 2014 as the oil demand was already affected by the coronavirus.
Previously allies, OPEC and Russia failed to reach an agreement to cut down on outputs to support the prices. Over the weekend, Saudi Arabia slashed its selling prices and is further expected to add 10 million barrels a day to the market.
As oil prices took a hit, the global markets tumbled with the yield on 10-year Treasuries falling to an all-time low of 0.4655%. For a first in history, the entire curve is now trading below 1%.
The market is also pricing the Federal Reserve to cut policy rates to 0%. “Markets are now pricing in a 100bps cut on March 18th. That’s 1.50% over a two week period and brings us to 0%,” said analyst Ceteris Paribus.
With “everybody’s buying Treasuries” we are in the uncharted category, which according to market commentators the US central bank only has QE left to combat the global financial crisis.
The spreading coronavirus already had investors on edge for weeks, now the crude prices are in free fall. This will affect BTC prices which as we have been seeing in 2020 have been affected by the events outside of the industry.
According to bitcoin bear, trader Tone Vays, “all bearish targets are back on the table” which puts the new lows for the flagship cryptocurrency at sub $6k and if we fall below $6,500, Vays says the crypto asset could drop to $5k before the bitcoin block reward halving in May 2020.
At the time of writing, BTC/USD has been trading around $7,800 while managing the daily trading volume of over $2 billion on top ten exchanges with real volume, as per Messari.