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Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Justin McQueen, Strategist

Bitcoin, Ethereum, S&P 500, JPY Price Analysis & News

  • Tether De-Pegging Exacerbates Cryptocurrency Crash
  • Bitcoin Breaks Through Key Levels
  • Equity Sell-Off Prompts Demand For JPY and Bond

Tether De-Pegging Exacerbates Cryptocurrency Crash

Heavy losses once again in the cryptocurrency space with de-pegging fears in stablecoins exacerbating the current rout. Yesterday’s focus had been on the de-pegging in Terra, which saw the likes of Luna fall over 90%. However, concerns are now mounting over Tethers potential de-pegging which would have a far greater consequence for cryptocurrencies. This morning, Tether briefly fell below $0.95 before quickly retracing back to $0.98. Looking ahead, this will be a key sentiment gauge for the Crypto space.

Tether Chart: Daily Time Frame

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Source: TradingView

Bitcoin Breaks Through Key Levels

Bitcoin: Key support levels broken overnight with 30k and the 2021 lows both giving way. However, there would be signs of encouragement IF 30k is reclaimed in quick fashion. That said, below 25k exposes the prior 2017 peak at 19500.

Bitcoin Chart: Daily Time Frame

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Source: Refinitiv

Ethereum: Through 2k this morning, although triple bottom support at 1700 has held up for now. While this might offer some comfort, a turnaround in equities will be needed for a more meaningful recovery. Should the triple bottom fail to hold, there is little in the way of support until the March 2021 lows at 1280-1320.

Ethereum Chart: Weekly Time Frame

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Source: Refinitiv

Equity Sell-Off Prompts Demand For JPY and Bond

Equities: While the market response to the higher than expected inflation print was a choppy one initially, there was little doubt that overall, it was bad for risk appetite. In turn, S&P 500 futures are now testing 3900 and any bounce backs are likely to be sold into. The bias remains to sell the rip. That being said, some normality has resumed with both the Japanese Yen and Bonds seeing flight to safety flows in amidst the latest market sell-off.

S&P 500, AUD/JPY, US 10Y Yield Chart: Daily Time Frame

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Source: Refinitiv

G10 FX 1D Change

Cryptocurrency Crash, Tether De-Pegging, S&P 500 Sinks, JPY Outperforms

Source: Refinitiv, DailyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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