Decentral Block Post

Bitcoin (BTC) crashed below $16,000 on Nov. 9, driving the price to its lowest level in two years. The 2-day correction totaled a 27% downtrend and wiped out $352 million worth of leverage long (buy) futures contracts.

To date, Bitcoin price is 65% down for 2022, but it's essential to compare its price action against the world's biggest tech companies. For instance, Meta Platforms (META) is down 70% year-to-date, and Snap Inc. (SNAP) has dropped 80%. Furthermore, CloudFare (NET) lost 71% in 2022, followed by Roblox Corporation (RBLX) and Snapchat (SNAP), both down 70%.

Inflationary pressure and fear of a global recession have driven investors away from riskier assets. This protective movement has caused the U.S. Treasuries' 5-year yield to reach 4.33% earlier in November, its highest level in 15 years. Investors demand a higher premium to hold government debt, signaling a lack of confidence in the Central Bank's ability to curb inflation.

Contagion risks from FTX and Alameda Research's insolvency are the most pressing issues. The trading group managed multiple cryptocurrency project funds and was the second-largest trading exchange for Bitcoin derivatives.

Bulls were overly optimistic and will suffer the consequences

The open interest for the Nov. 11 options expiry is $710 million, but the actual figure will be lower since bulls were ill-prepared for prices below $19,000. These traders were overconfident after Bitcoin sustained above $20,000 for almost two weeks.

Bitcoin (BTC) surged $1,000 in five minutes before the Nov. 10 Wall Street open as United States inflation and jobs data boosted risk assets.

CPI comes in lowest since the start of 2022

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to daily highs of $17,782 on Bitstamp.

The pair was just hours from a more-than-two-year low below $15,700 at the time, taking its 24-hour low-to-high to 12.8%.

At the time of writing, BTC/USD circled $17,400 with volatility still rampant as U.S. markets opened to digest economic data.

This had come in the form of the Consumer Price Index (CPI) print for October, along with jobless claims.

Bitcoin (BTC) and crypto markets saw fresh volatility on Nov. 10 after stablecoin Tether (USDT) unpegged from the U.S. dollar.

Tether exec: "No issues" with USDT

Data from Cointelegraph Markets Pro and TradingView showed USDT hitting lows of $0.971 on Bitstamp on the day amid fears that the largest stablecoin by market cap may fall further.

Those fears were stoked by evidence of embattled exchange FTX and sister company Alameda Research attempting to short USDT.

Currently in the throws of a crisis reminiscent of the Terra LUNA debacle, both firms have fallen foul of the cryptocurrency community and beyond as regulators step up scrutiny of the industry.

The impact has been felt across crypto prices, with BTC/USD reaching more than two-year lows of $15,638 on Bitstamp.

Bitcoin (BTC) and crypto markets saw fresh volatility on Nov. 10 after stablecoin Tether (USDT) unpegged from the United States dollar.

Tether executive: “No issues” with USDT

Data from Cointelegraph Markets Pro and TradingView showed USDT hitting lows of $0.971 on Bitstamp on the day amid fears that the largest stablecoin by market capitalization may fall further.

Those fears were stoked by evidence of embattled exchange FTX and sister company Alameda Research attempting to short USDT.

Currently in the throws of a crisis reminiscent of the Terra debacle, both firms have fallen foul of the cryptocurrency community and beyond as regulators step up scrutiny of the industry.

The impact has been felt across crypto prices, with BTC/USD reaching more than two-year lows of $15,638 on Bitstamp.

In April 2022, the Tron network launched USDD, a token pegged to the U.S. dollar, as an "over-collateralized stablecoin," meaning its likelihood of slipping below $1 should be lower due to excessive reserves backing its valuation.

USDD stablecoin slips below $1 peg

But it was not enough to keep USDD's price anchored to $1 on Nov. 8 when some whales dumped over 11 million USDD tokens to seek exposure in rival stablecoins Tether (USDT) and USD Coin (USDC). A day later, USDD's price fell to as low as $0.96, followed by a modest recovery to $0.98 on Nov. 10. 

The selling pressure was visible more broadly in the USDD liquidity pool on Curve's decentralized finance protocol. As of Nov. 10, the pool was heavily imbalanced, holding nearly 82.50% in USDD and the rest in USDT, USDC, and DAI stablecoins. 

Tron founder Justin Sun speculates that Alameda Research, a crypto hedge fund headed by FTX's Sam Bankman-Fried, could be the whale dumping its USDD holdings to avoid insolvency. Alameda's balance sheet reportedly was 50% FTT (FTT), FTX's native token that has recently fallen more than 90%.

Miscalculated collateral reserves

USDD is issued by Tron DAO Reserve (TDR), which also serves as the custodian of its collateral. TDR is primarily responsible for selling the collateral to maintain USDD's peg in the event of a sell-side shock.