Usually, the actual bottom of a market is an event. It has fireworks, great narrative, maximum fear and is usually punctuated by a plethora of FUD.
Nothing attracts the FUD-factory like Tether and Bitcoin. And this week was no exception, where we saw the peg breaking the momentum of UST leak into the USDT market.
We saw the market react to the supposed Tether ‘de-pegging’ by exiting into all the other stablecoins. The chart below shows USDT (green) against USDC, BUSD and DAI, which all spiked above $1 during the event.
Impressively, Tether returned to its peg in short order, and we have seen this sector of the market quiet down significantly. A flash in the pan, however, it had the desired effect, Bitcoin sank to $25.4k and we experienced a non-trivial capitulation event.
Now it may or may not be THE event that ends the bear. Quite often in Bitcoin, things come in twos. So I wouldn’t be surprised if we have to experience a phase of time pain, consolidation, boredom, and another retest of the mid $20k region, just to make sure.
This is how bottoms are hammered out. Where the beatings continue until morale improves…Markets are unrelenting, they punish over and over again. But those whom come out the other side, get to ride the bull that quite often, changes lives.