USDT/USD offers an opportunity for speculators who have solid tactical ability and patience. Tether and its sister company, Bitfinex, reached a settlement with New York State early last week in which the companies working under the umbrella of iFinex agreed to pay a fine of 18 million USD. The announced settlement actually clears the shadows which were lingering over USDT/USD and allows traders to focus on technical charts for the stable coin, and to consider the prevailing sentiment of the cryptocurrency landscape.
USDT/USD has a historically tight trading range which does not veer too far from the norm of 1.0000 depending on support and resistance levels. Certainly, USDT/USD does trade in an incremental fashion, which allows speculators to wager on its trend, but the extremely clustered value band must be given strict attention at all times.
The past month of trading has seen USDT/USD trade mostly above the 1.0000 level. However resistance levels have proven difficult to puncture higher and most of the trading in February has taken place below the value of 1.0016. Current resistance appears to be near the 1.0015 mark. And even as the news of a settlement emerged for Tether with New York State, USDT/USD did not produce an extreme amount of volatility and resistance levels held.
Tactical speculators should continue to trade USDT/USD with strict limit orders; proper leverage, patience and use of take-profit and stop-loss ratios need to be part of all strategies. Looking for a sudden breakout within USDT/USD will prove a costly endeavor if the goals of the trader do not match what the potential value range of Tether is capable of delivering. Traders need to have legitimate targets when trading USDT/USD and they also need to be aware of carrying charges overnight which could come into effect via some trading platforms.
Technically, the past six months of trading have seen most of USDT/USD price action above the 1.0000 ratio. This higher value band has occurred as the cryptocurrency marketplace has seen an exuberant bullish run higher. Make no mistake that USDT/USD gains incremental positive traction above 1.0000 when the cryptocurrency market is in a jubilant mood.
Speculators who have a positive outlook regarding cryptocurrencies for the month of March should consider being buyers if USDT/USD approaches the support level of 1.0000. If a trader has a negative outlook regarding the current state of the cryptocurrency market, they may want to use resistance levels near the 1.0015 mark as a location to activate selling positions and look for trajectories downward. After attaining a strong bullish run the past six months, going against the trend and being a seller could prove dangerous.
However, cryptocurrencies, and particularly USDT/USD, are traded heavily on existing sentiment. Looking for a sudden reversal higher may be logical based on the bullish sentiment expressed the past six months. But if you have a perception that values will decrease near term in cryptocurrencies and Bitcoin, then selling USDT/USD when it touches resistance may make a good tactical choice.
USDT/USD Outlook for March:
March will likely remain a straight forward tactical trading environment for USDT/USD. The value range will remain tight. Likely support and resistance levels could be between 0.9980 and 1.0033.
Support near the 0.9995 mark could be a justifiable target for traders, but looking for a closer mark near the 0.9998 level first should be the first priority. If the lower level of 0.9995 falters, speculators may want to aim for lower levels, but they should have stop losses working and feel bearish sentiment is strong enough to pursue selling positions with lower targets.
Current resistance for USDT/USD looks to be prevalent near 1.0015, if Tether climbs higher against the USD, it could challenge the 1.0018 mark, with a potential high of 1.0033 if bullish behavior builds in the cryptocurrency marketplace exuberantly.
