In the past two days, Bitcoin was above the $7,000 mark. There was even a point when Bitcoin was actually above $7,100. It didn’t take long until Bitcoin dropped once again reaching below $6,900. And Bitcoin isn’t alone. Other cryptocurrencies have fallen as well from 5 to 15 percent just in the last 24 hours. If you are going to ask Lil Uzi Vercoin, who is a respected crypto trader and analyst, “BTC topped the bollinger bands and rejected the ichimoku cloud resistance here, $7,130 is the resistance to break but it looks more difficult now, expecting $6,700 to $6,500 to be good support. I’ll probably long if we test $6,500-$6,600 again”.
No Price Manipulation
Joseph Lubin who is the co-founder of Ethereum mentioned on Yahoo Finance’s Final Round that he doubts that there is price manipulation on the part of Tether. Tether was the very first token that has been backed by fiat.
In June, there was a suspicion that Bitcoin’s bullish performance in 2017 was a result of price manipulation. According to the study that was conducted by analysts from University of Texas, the paper claims that “purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices”.
Lubin is not exactly convinced about the report. He mentioned that “based on our analysis, which involves just talking to a bunch of people in the space, we do believe that (USDT) are backed 1:1 by US dollars in bank accounts”. However, he added that it is “still not 100 percent solid in terms of a story, from my perspective”.
But when it comes to the topic of price manipulation, Lubin mentioned that “I’m not sure that market manipulations are related to Tether directly, if they do exist. It has been an unregulated market set of exchanges that enable big players to do what they want to do […] Ideally we’ll get a little better regulation of those centralized exchanges at least”.
In June, USDT proved that it has enough funds to back the token. Law firm Freeh Sporkin & Sullivan LLP did an unofficial audit on Tether’s account and discovered that there is indeed enough funding that can back the token 1:1 to the US dollars. However, there is a catch to the audit that was made. The firm noted that it is “not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles”.
Should You be Alarmed During a Bearish Market?
If you are going to take a look at Bitcoin’s performance the entire year, it can be quite alarming especially for someone who entered the market late in 2017. For Charlie Lee of Litecoin, he thinks that there will be a positive momentum in the next three to four years. He also mentioned that it is a good time to buy Bitcoin.
He said that “It’s always good to buy on the way down to dollar-cost average your buy-in”. He added that “As long as you don’t spend money that you can’t afford to lose, I think that’s fine”.