Bitcoin has lowest close since November 2017, closing at $6,385 and Ethereum closed at $466.32. Both coins fell through their technical support levels.
A disturbing relationship between bitcoin and tether is adding to the concerns over bitcoin. Tether is one of the most traded currencies and it shows an uncanny pattern that indicates it is being used to shore up the bitcoin price. John Griffin and Amin Shams, both from the University of Texas issued a paper regarding the relationship over a yearlong term. They determined that tethers are created in large blocks and most of the coins are moved to Bitfinex and stored. When the price of bitcoin falls tethers are used to purchase bitcoins to stem the drop in bitcoin’s price. This action is not suspect as it is a standard practice to buy the dips but the standard practice involves a reciprocal action of selling when the price goes up. When it comes to tether, this is not the case. This would seem to indicate that tether is used to protect the bitcoin price.
Crypto investors found this report unnerving and have moved to sell off their long positions causing the price to further slump. There is no indication that the crypto market will soon disappear but it does appear that the cryptos are falling to their realistic values. The meteoric rise was not realistic for any asset and it was always believed that when bitcoin almost reached $20,000, the coin was in bubble territory.