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USDT/USD: Curious Article in WSJ Could Spur on Tether Wagers

USDT/USD has traded in its typical tight range the past five days, achieving a high on the 1st of April and then having reversed slightly lower

USDT/USD looks like it remains in its regular tight range as Tether serves as a ‘stable coin’ for the broad cryptocurrency market. With its price hovering fractionally higher and sometimes traversing incrementally lower, there is not much volatility and day traders could frankly become bored to tears trying to pursue the important digital asset as a wager.

On the 1st of April, USDT/USD moved up to the almost remarkable price of 1.0006000 and has since traded lower.  The price of Tether as of this writing is near the 1.00020000 level as USDT/USD continues to trade slightly above its 1.00000000 ratio which serves as its ‘cornerstone’ regarding its ‘promise’ to work as a stable coin in the volatile world of cryptocurrency, thus providing ‘assured’ value.

However, and very curiously, the Wall Street Journal published an article this weekend that states there is ‘known’ short selling activity being reported in USDT/USD by some large hedge funds. The article in the WSJ states that some investors feel the value of Tether is prone to a potential loss of value because of rather less than transparent financial infrastructure.

Tether has a history of having its value questioned before, in fact its parent company was taken to court in the U.S by regulators who questioned the financial accounting of the company and a fine was issued.   However, USDT/USD continues to tread the 1.00000000 ratio very comfortably and as pointed out above only a few days ago managed a rather polite high. Speculators who participate in USDT/USD need to have patience and the ability to absorb the potential costs via their transactions, which could outweigh the benefits of profits being made by trading Tether. Wagering on USDT/USD should be done by experienced traders who can manage their risk and leverage well. The question of stamina is also vital, because if a trader wants to pursue a position which tries to mirror a hedge fund, timeframes will be much longer than a mere near term trade.

Traders who want to wager on downside price action in USDT/USD today potentially being created because of the possible noise the Wall Street Journal article published yesterday cannot be blamed. However, speculators should note that negative shadows regarding news have had little effect on USDT/USD in the past, and this time may prove to be no different in the short term. If a speculator chooses to sell USDT/USD they should buy near perceived resistance levels and use strict price orders for take profit targets.

Current Resistance: 1.00041000

Current Support: 1.00020000

High Target: 1.0050000

Low Target: 0.99990000


Robert Petrucci
About Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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