Tether, the issuer of the leading cryptocurrency stablecoin, USDT, is undergoing a significant strategic transition. The company is ending its support for USDT tokens built on the Omni protocol, Kusama, and the Bitcoin Cash-based Simple Ledger Protocol (SLP).
Tether’s decision stems from an assessment of the effort required to maintain USDT on these networks, encompassing aspects like security, customer support, compliance, and regulatory oversight. To ensure the security, usability, and sustainability of USDT, the company has concluded that supporting these networks without adequate traction is not viable.
Effective from August 17, users will no longer have the option to mint USDT on these platforms. Tether will facilitate redemptions of tokens issued on these networks for the next 12 months, and independent exchange channels will also remain operational.
Tether’s Focus on Bitcoin
Tether expressed disappointment in the status of USDT on the Omni protocol, as it was the initial platform when USDT was launched in 2014. However, after the emergence of new transport layers, many cryptocurrency exchanges favored these alternatives over Omni.
Despite this, Tether remains optimistic about Omni’s potential. The company believes that increased utilization of Omni’s decentralized exchange and token issuance protocol, including NFTs, could lead to a reconsideration of issuing USDT on Bitcoin via Omni.
Nonetheless, Tether reaffirms its strong support for Bitcoin, describing it as the most secure, audited, and decentralized blockchain ever created. The company is actively developing RGB, a smart contracts system designed to operate on top of Bitcoin and the Lightning Network. Tether also plans to release USDT on this platform, anticipating that it will add a powerful and scalable layer to the Bitcoin ecosystem.
Impact of Tether’s Decision on Bitcoin Market
Tether’s decision to discontinue USDT support on Bitcoin could pose a risk to the Bitcoin market. USDT is widely used in cryptocurrency trading, and its reduced availability on the Bitcoin Omni layer might lead to lower liquidity and increased uncertainty. This shift could potentially exert downward pressure on Bitcoin’s price, as evidenced by its recent drop to $26,220.
Factors contributing to Bitcoin’s recent price decline include Tether’s decision, Elon Musk’s sale of BTC holdings, and broader market sell-offs. Traders are closely monitoring Musk’s activities for hints of new investments. Bitcoin’s price has recently experienced a 10% drop, reaching $26,220, with further declines appearing likely.
Bitcoin Price Outlook
Bitcoin has witnessed a significant decline, falling from $29,000 to approximately $26,000 in a short period. Currently, it is establishing support around $26,200, alongside an uncertain candle pattern.
Upon deeper analysis, there is potential for a bullish correction, as indicated by the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), both in overbought territory. This suggests the possibility of a bullish move if the price remains above $26,200.
Conversely, key levels at 23.6% and 38.2% represent significant support and resistance points, with $25,600 as a support target and $26,800 and $27,200 as resistance barriers.
Further fluctuations could expose Bitcoin to the next resistance level at $28,000, defined by the 61.8% Fibonacci correction level.
However, breaking below $26,200 could trigger additional depreciation, possibly toward $25,600. Present market conditions highlight $26,200 as a critical level, likely attracting buying interest, while breaching it could initiate selling positions.