Bitcoin reversed its weekend bull run on Monday, falling below $68,000.
Paolo Ardoino, CEO of Tether, the issuer of USDT, the world’s largest stablecoin, recently introduced details of USDT’s reserve assets at the PlanB event in Lugano, Switzerland. However, there have been recent allegations that the company is being investigated by the U.S. Department of Justice and the Treasury Department.
Ardoino revealed that Tether holds about $100 billion in U.S. Treasury bonds, more than 82,000 bitcoins, worth about $5.5 billion at current market prices, and 48 tons of gold. He emphasized the robustness of these asset reserves in response to the panic and anxiety caused by a recent (Wall Street Journal) article.
The article said the U.S. government is investigating whether the company violated anti-money laundering laws and U.S. sanctions.
Ardoino has strongly denied the allegations, saying: “As we told (the Wall Street Journal), there is no indication that Tether is under investigation. This story is just rehashing the same old story, period.”
He also highlighted Tether’s cooperation with law enforcement agencies to help recover stolen digital assets and freeze illegal transactions. “We regularly communicate directly with law enforcement officials to help prevent the abuse of USDT by bad countries, terrorists, and criminals. If we were indeed under investigation as claimed in the article, we would know. Therefore, we can confirm that these allegations are absolutely false.”
According to Tether, since 2014, they have helped law enforcement recover approximately $109 million for illegal activities such as fraud, sanctions evasion, and cybercrime.
Paolo also recently criticized the United States for its cryptocurrency regulatory policies lagging behind other countries, causing many innovative digital asset companies to move to more favorable jurisdictions. But he believes that this situation will improve after the 2024 US presidential election.
Additionally, Tether’s USDT reached a staggering $120 billion market cap in October 2024, which investors and speculators believe could be a bullish signal for the cryptocurrency market that could drive prices higher in the coming weeks and months.
A key factor in Bitcoin price volatility is open interest (OI).
For those who follow the Bitcoin market, recent price fluctuations are closely related to open interest. "Many people think the decline is due to the US investigation into USDT, but this is not the case. In the past few months, whether at highs or lows, there have always been some emotional narratives that confuse everyone when making decisions," Twitter opinion leader Luca pointed out on Twitter.
He believes that the price drop was not triggered by news, but rather due to the existence of high open interest, which market makers tried to clear before the price rose.
Data from on-chain analytics firm Glassnode shows that the single-day drop in open interest (OI) on October 25 was the largest since August.
“It amazes me that Bitcoin still trades like a risk asset. I believe one day Bitcoin will trade as stable as gold,” said Charles Edwards, founder of Capriole Investments, a quantitative Bitcoin and digital asset fund.
“On a positive note, 10,000 Bitcoin of open interest was wiped out in just a few minutes and our open interest levels are now back to where they were when Bitcoin was at $59,000,” he noted.
According to CoinTelegraph, Bitcoin once attempted to recover at $70,000, and open interest hit a record high of more than $40 billion.
Luca also supports those who predict that prices will fall to the important psychological support level of $60,000 again. “If we look at the liquidation heat map, it is clear that longs have been trying to catch the local bottom all week, but failed every time due to the presence of highly leveraged positions,” he mentioned in the post, referring to the liquidity of exchange order books.
“Now a similar situation has occurred again, with a large number of long positions concentrated below $65,000, which is a very important support level. Once this support level is lost, the next support level of $60,000 will be exposed.”
Monitoring resource CoinGlass shows that current buy liquidity is below the spot price, which is close to $61,500.
“Personally, I think we’ll likely see one more push higher towards $60,000 before we can judge any local bottom forming,” Luca concluded.
Bitcoin Technical Analysis
Muhammad Umair, an analyst at FXEmpire, mentioned that Bitcoin's weekly chart shows the formation of a cup pattern from 2021 to 2024. The price is approaching the resistance line of this pattern and seems ready to break out. The edge of this cup has formed a descending expanding wedge, suggesting that an upside breakout may occur.
Furthermore, the bottom line of the falling wedge intersects with the cup pattern, further strengthening the bullish signal. A breakout of this cup pattern could push prices to around $100,000, a target based on a resistance line extending from the March 2021 high.
The falling broadening wedge pattern on the weekly chart is also visible on the daily chart, and the price is currently consolidating near the edge of the pattern, which could trigger a strong upside move if it breaks out. Last week's close was above the line, indicating bullish pressure. The price remains above the 50-day and 200-day simple moving averages (SMAs), further highlighting the bullish potential.
The relative strength index (RSI) has retreated to moderate levels during the past few days of consolidation, which suggests that the price could rebound from the current support levels.
