Tether Stays Below $1 For Six Months, Bad Sign For BTC?

Tether stays below $1 since July 2019 while Bitcoin managed to hold above the $7,000 level until the end of the year but it could turn bearish in the short term as the New Year starts. The Tether price is stuck and this could be a bad sign for Bitcoin as we are reading in our Tether news.

Tether has been in the central point in the crypto community and provided massive liquidity for the markets but has also been seen as the subject of disparagement for the potential manipulation of the prices and fake Bitcoin demand. It’s obvious that Tether stays below $1 while Bitcoin turns bearish. USDT has been bearish since the contraction of the market in July. Market analyst Josh Olszewich noted:

 “i really cant get bullish again until $USDT > $1. since July, $USDT < $1 hasn’t been bullish”

The idea behind his stance is that it represents people exiting out of the USDT and back into fiat which is an outflow from crypto. As we have seen before, the total market capitalization collapsed over 40 percent during the same period. At the time of writing, Bitcoin dropped back to the $,100 level which was the support holds for the past week or so. Below this level, there’s a support line at $7,000 and weaker support at the $6,800 range. Bitcoin is now in its longest consolidation period since February last year when it stayed below $4,000 for around six weeks. Tether’s market movements have a huge impact on Bitcoin prices as well and there seems to be a correlation between USDT expansion and contraction and BTC movements according to Elias Simos:

 “Buying $BTC when Tether expands and selling when it contracts, yielded a 2x return – HODLing yielded par.”

Last month, Tether’s printers were launched again as another $20 million were minted by the Treasury just two days before the year ended. Before that, $40 million USDT entered the markets on December 11 and another $30 million on December 20. If BTC rallies occurred after the issuance of Tether tokens, the increased activity could spark another rally. According to the Tether Transparency Report, the total supply of USDT coins is $4.8 billion which is higher than that reported by the analytics platforms such as CoinMarketCap.com.

There has also been a lot of migration from OMNI to Ethereum and the Tron network which could have affected Bitcoin’s on-chain activity. There are about $2 billion USDT in ERC20 and almost a billion in Tron’s equivalent.