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TL;DR back to calm, for now – but we’re waiting
The markets have calmed after their violent moves earlier in the week. Now that Tether has re-established a banking relationship, money is able to flow into and out of the ecosystem – albeit by obscure and exclusive channels – and so USDT is revaluing back to its normal levels. The premium on Bitfinex is closer to its historical range, though not yet quite back to normal. At the time of writing, it’s around $200.
All of this reinforces the narrative we expressed on Wednesday, which is that the massive spike in the early hours of Monday was a carefully-executed move designed to take full advantage of quiet trading, low liquidity, stable conditions and – importantly – that closed ecosystem for Tether, which left the currency at the mercy of supply and demand alone. You can see our full analysis of that event here.
Onwards. Today, we’ve just seen a fall back to the $6,350 level (we’re still using Stamp for now as prices are a more accurate reflection of bitcoin’s value). Once again we’re back to low trading volumes and it won’t take much to move the market. Next support is around the $6,200 zone, then the all-important long-term $6k zone. And, once again, indicators are back to neutral. This is a sideways drift, a market waiting for its next cue, whatever form that takes. We stand by our belief that resolution will come by the end of the month. Downward-sloping resistance is around the $6,500 level and there aren’t many days left before that meets the $6k floor. New information about the bitcoin ETFs – particularly the critical VanEck-SolidX one – should appear in another week, which may prove a factor, especially for short-term market direction.
In other news, Scandinavia’s largest bank Nordea is being investigated for laundering up to $175 million in dirty money. This comes after Denmark’s largest bank, Danske, was fined for laundering EUR 200 billion. The significance? Both banks earlier this year advised employees not to trade bitcoin, and in Nordea’s case banned them from acquiring BTC. A major exchange lost its banking relationship with Nordea, with money laundering concerns cited.
You can’t make this stuff up.
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