After a seemingly endless cycle of non-action, the crypto market finally saw a spark of life on Monday, as fears of a Tether ‘bank run’ hit newfound highs, while confusion strong-handed investors into making moves. In the span of just a few hours, exchanges recorded billions of dollars volume, quickly pushing this market off its year-to-date lows from a volume standpoint.
Crypto Trading Volumes Surge To 1 Month High
As reported by NewsBTC previously, crypto investors were in for a treat in the wee hours of Monday morning, as digital assets saw an unexpected influx (and a large one at that) of buying pressure, pushing Bitcoin above $7,000 for the first time in months. Following some quick internet sleuthing, many traders determined that Bitcoin’s strong surge to the upside could be boiled down to a single factor.
This factor, of course, as widely reported, was the fears of Bitfinex’s insolvency spreading like wildfire through this market, resulting in a capital flight of cryptocurrencies from Bitfinex to other leading crypto exchanges.
At one point, the now-infamous ‘Bitfinex premium’ somehow surpassed $1,000, as Bitcoin surged above $7,600 due to thin order books on the aforementioned exchange. On the other hand, on well-regulated platforms like Gemini and Coinbase, which offer insurance for their client’s crypto holdings, Bitcoin only traded at a relatively measly $6,600, which was the “true” price of the digital asset.
Volumes on Bitfinex quickly surged, as users rushed to liquidate their U.S. credit for crypto assets to subsequently withdraw their holdings to a wallet of someone or some organization they could trust.
Due to the well-read belief that Tether goes hand-in-hand with Bitfinex, traders also rushed to sell their USDT holdings, as many claimed that the Tether Foundation didn’t have the reserves to back all issued stablecoins. At one point, Tether tokens fell under $0.91 on Kraken, alluding to the fact that a copious amount of USDT had just been dumped by a multitude of wary traders.
The rise of Bitfinex’s insolvency rumors, coupled with growing fears about the legitimacy of Tether, happened to manufacture a perfect storm, so to speak, resulting in a period of market uncertainty, confusion, and even panic in some fringe cases.
And although the collective value of all crypto assets saw a $20 billion bump, many investors claimed that this obviously wasn’t the breakout that bulls have been clamoring for.
Still, what went under the radar of many investors is that volumes saw an unprecedented surge in correlation with thousands of traders choosing to sell their USDT and withdraw their funds from Bitfinex, which was a sign some analysts have been waiting for.
It wasn’t only Bitcoin that saw its volume return, as cryptocurrencies across the board all saw their time in the sunlight in the past 24 hours. To attest to this fact, per data compiled by CoinMarketCap, the total volume seen by crypto rose from $9 billion on Sunday to $22 billion, where this figure has held for the past few hours.
Assuming that volume has returned and that it’s here to stay, technicians will continue to eye Bitcoin’s $6,800 price level, which has long been a level of heavy resistance for the leading crypto asset. Fundstrat’s Robert Sluymer, for one, recently claimed that while now isn’t the time to increase your exposure to Bitcoin, a convincing move above “September’s real and relative highs,” which are both situated around the $6,800 level, may indicate that this market is finally undergoing a trend reversal.
Keeping in mind that the arrival of substantial amounts of trading volume is often the gun that sets off the race, so to speak, many are starting to believe that a bull run could be in this market’s grasp.