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Expert Opinion: Tether [USDT] becomes 4th largest cryptocurrency by Marketcap As Traders Take Foot Off The Gas

expert-opinion-tether-usdt-becomes-4th-largest-cryptocurrency-by-marketcap-as-traders-take-foot-off-the-gas

“This analysis is an adaptation from the work of Mati Greenspan, Senior Market Analyst at eToro”

Key Highlights:

  • USDT moves to the fourth position in the market cap ranking
  • The rise of USDT suggests the traders are fearful
  • Short positions on Bitcoin fall drastically

Tether makes a surprise jump

While the crypto markets remained dull and bearish, the traders in crypto space were shocked to see the stablecoin Tether (USDT) take 4th place in the market cap rankings. While it has been reiterated that the market cap metric is not a great way to measure the value of crypto assets but seeing USDT rising up the ranks so quickly can be a very telling sign of investor sentiment. Generally speaking, if traders are fearful of volatility in the crypto market and want to reduce exposure, the default option at many exchanges is to hold the money in USDT.

 

Short positions on Bitcoin fall drastically

While this may sound bearish. To be clear, this is neither a bullish nor a bearish signal, it just means that traders are taking their foot off the gas for a bit. In the graph, below that comes from tradingview.com, one can see that short positions on bitcoin (blue line) have come down pretty drastically over the last two months whereas long positions (red line) haven’t increased by much. Indeed, Tether’s market cap has grown during this time frame but if we zoom out even just a little bit we can see that USDT market cap has been higher than it is now. A neutral position could very well be a sign of good things to come as it might just signal that the bears are finally letting up.

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