Ethereum floats above $1000 in anticipation of its major Merge upgrade.
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In today’s article, we will take a brief look at the USDT depeg situation and the price actions of major crypto assets.
mooring under the weather
The stablecoin ecosystem, which plays an important role in bridging traditional finance and its decentralized counterpart, has been under enormous pressure and scrutiny in recent months. After the collapse of the UST algorithmic stablecoin, sources report that major hedge funds are trying to short the (USDT) connection by borrowing millions of dollars in loans. Tether is by far the largest stablecoin by market cap at over $65 billion. A stablecoin is a type of crypto asset that is pegged to an asset such as the US dollar and claims to be backed by reserves that allow holders to redeem their stablecoins for the asset in question. USDT is currently trading on exchanges at $0.9989, slightly below its parity.
For years, many sources claimed that Tether was not 100% backed by reserves, had exposure to real estate giant Evergrande, and short-term debt like Chinese commercial paper, etc. Tether officials have continued to allay doubts and fears as they have not. he failed any redemption in the past. In fact, according to his CTO, Tether has reaffirmed that all USDT is redeemed for $1 (even if unpegged) and has made $7 billion worth of swaps in the last 48 hours.
Bitcoin pushing down
For the past week, Bitcoin (BTC) has been between $20,000 and $21,900 and its price movements are greatly affected by major financial markets like Nasdaq. Adding more trouble, Russia has defaulted on its international bonds for the first time in a century, making its assets to the tune of $40 billion untouchable. While many have argued that BTC is on the brink of a bullish breakout, macroeconomic conditions do not warrant a prolonged rally, even if it were to occur.
Short-term support has formed at $19,637, while major resistance lies at $21,888. BTC is currently trading at $20,890, negating last week’s gains. Market participants are vying for a full V-shaped recovery, although the conditions for it to happen are unlikely to be in place. Despite the collapse of large decentralized finance (DeFi) firms, traditional firms like Goldman Sachs and crypto exchanges like FTX have stepped in to alleviate insolvency issues by striking deals with Voyager, BlockFi, and Celsius.
Ethereum anticipates Merge
Ethereum (ETH), the second largest crypto asset by market capitalization, has been trying to stay strong in the face of strong bearish weather. ETH is currently at $1,200, down 2% in the last 24 hours. Ethereum has an important and crucial update called “Combine” called Ethereum 2.0. The upgrade, which will help transition the ETH network from proof-of-work (PoW) to proof-of-stake (PoS), has been in the works for a long time. If the upgrade were to happen, it is likely to resolve the main challenges facing ETH, such as the high cost of gasoline, traffic congestion, etc.
Among the top 100 altcoins, most crypto assets flashed red as BTC declined near the $21,000 region, except for Chiliz (CHZ) and a few others. CHZ trading volumes increased by 350%, leading to a 16% rally. The Chiliz project, which aims to generate income for sports clubs through blockchain, may appreciate its price even more if it achieves more agreements with sports clubs and organizations.
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Disclaimer: This article was written by Giottus Crypto Exchange as part of a paid partnership with The News Minute. Investments in crypto assets or cryptocurrencies are subject to market risks, such as volatility, and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about investing.