There is a good observation to be made on USD Coin’s (USDC) recent de-pegging coinciding with the rally on bitcoin and ether.
Or more tellingly, bitcoin and ether trading volumes skyrocketed at the same time as investors pulled out of USDC due to exposure to the collapse of Silicon Valley Bank.
This could indicate that traders fled the USDC right into the arms of the two largest, and arguably safest, cryptocurrencies.
That’s certainly what Binance does anyway.
Tether (USDT), the market-leading stablecoin, also saw a boost to its market cap, suggesting a flight to … I’d say quality, but that’s a loaded term when discussing Tether, given its checkered history.
Taking the USDC ➡️BTC-ETH observation to task, it’s only fair to suggest that the crypto’s impressive, perhaps surprising, rally over the weekend could start to run out of steam now that the USDC is back to its dollar peg.
There appears to be a cooling on the one-hour chart after BTC/USDT hit a high of $24,820 in Tuesday’s early trade.
At the time of writing, the pair exchanged hands at US$24,260, wedged between a US$25,000 selling wall and buying support at US$24,000/US$23,900, according to the Binance order book.
Does this mean that BTC has returned to the 24k to 25k channel favored by the market in mid to late February? Perhaps, but with the markets on tenterhooks, continued volatility should not be ruled out.
Bitcoin (BTC) back in channel mode? – Source: currency.com
While BTC remains in the green this Tuesday morning, Ether (ETH) has actually received a red candlestick.
ETH/USDT closed 6% higher at yesterday’s close, but has so far cut back 0.3% today, with the pair changing hands at US$1,670 at the time of writing.
USD 1700 has been a sticking point for Ether even before the November 2022 FTX collapse, so don’t expect the bulls to fly past this hard wall of resistance with any degree of ease.
In the altcoin space
In times of (semi) crisis, attention tends to shift away from altcoins to the bitcoin and ether benchmarks. We can see this trend at the moment.
While BTC’s and ETH’s week-to-week gains remain in the high single digits, the same cannot be said for the rest of the top-20 set of altcoins.
Dogecoin (DOGE), Solana (SOL), Tron (TRX) and Litecoin (LTC) and Uniswap (UNI) are all in the red week after week, while Cardano (ADA) and Polkadot (DOT) have managed to hold on to small gains .
Binance’s BNB coin is the only large cap that has kept pace with the benchmarks, although news emerging that Binance is shedding its British Pounds on the ramp could prove to be a headwind going forward.
Global cryptocurrency market cap increased 4.5% overnight to $1.08 billion, while total value in decentralized finance (DeFi) rose 2% to $47.3 billion.
