Bitcoin falls below $27,000 lows by December 2020 as Tether’s stablecoin peg falls below 99 cents

Bitcoin (BTC) fell out of its long-term trading range on May 12 as continued selling pressure pushed markets back to 2020 levels.

BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView

Tether wobbles as UST stays below $0.60

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it exited the range it had been trading in since early 2021.

At the time of writing, the pair was circling $26,700 on Bitstamp, marking its lowest level since December 28, 2020.

The weakness came as the fallout from the Terra stablecoin meltdown continued to bounce around crypto and beyond, with rumors claiming even professional funds were struggling with solvency due to losses in LUNA and UST.

LUNA, Tether’s proprietary token, had practically lost value at the time of writing, trading at around $0.22. In early May, LUNA/USD was trading at $80.

LUNA/USD 1-day candlestick chart (Binance). Source: TradingView

UST, currently the focus of Terra executives committed to restoring the US dollar peg, was around $0.60, still a long way from $1 but more than double the week’s record lows .

UST/USD 1 hour candlestick chart (Coinbase). Source: TradingView

Nonetheless, the strain became increasingly visible across crypto as the largest stablecoin, Tether (USDT), itself began to show worrying signs that it was copying UST’s demise.

At the time of writing, USDT/USD is trading below $0.99 on major exchanges.

Commenting on the system stability, Paolo Ardoino, Tether’s Chief Technology Officer, said that withdrawals from USDT were proceeding normally.

“>300M redeemed in the last 24 hours without a sweat”, part of a tweet read.

USDT/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView

Data from on-chain analytics firm CryptoQuant added that major exchanges were seeing record outflows of stablecoins.

Exchange stablecoin outflows chart. Source: CryptoQuant

$1.22 billion liquidated in 24 hours

On the subject of losing the macro range low created in January 2021, analysts were still willing to view current levels as a potential opportunity.

Related: Ethereum whales get busy as transactions hit highest since January

“Whatever you lose in a macro downtrend, you will win back multiples in a macro uptrend. All you have to do is pay attention to the markets when they are extremely bearish,” said popular trader Rekt Capital argued.

A previous tweet from May 11 highlighted the macro area.

The extent of the losses was reflected in market liquidations. Data from on-chain monitoring resource Coinglass showed that for bitcoin and altcoins combined topped $1.2 billion in the 24 hours to press time.

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