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High fluctuations in the rates of cryptocurrencies pegged to the US dollar have created new opportunities for profit
Recent months have been marked by a real storm for stablecoins – several times the USDN has detached itself from the value of the dollar, THE UST is traded ten times cheaper than the dollar and even the reserve-backed USDT at the moment lost up to 5% of its value. The above events could be a real tragedy for users who neglected the rules of diversification and used only one stablecoin for all their operations or savings.
Despite the difficult weekdays for the stablecoin market, at the moments of their greatest volatility, there are also the most opportunities to make money on price movements for users with an aggressive trading style.
Features of the approach and worldview
Among the most convinced supporters of technical analysis, it is widely believed that in addition to market data, charts and the order book, all other information about the asset is superfluous and sometimes even distracting from the main thing. It is difficult to at least partially disagree with this in relation to the crypto market. There are many excellent projects with excellent fundamental indicators that the market ignores, at the same time, promoted tokens, albeit without functionality, can grow in price, only because there are enough buyers and sellers who create a “candy” price.
Trade only the chart – this approach should be adopted by users who want to make money on the movement of unstable stable rates. In this case, the purpose of the token, the team behind it and the development of scandals associated with the next fraud are absolutely unimportant – all this only distracts from the schedule and often, according to supporters of this approach, is aimed only at forcing the market to move in the direction necessary for manipulators.
Discarding the desire to buy “cheap dollars” in the long term in order to wait for the recovery of their price, you can look at the price charts of unstable stables from the other side, considering the well-established patterns of technical analysis, new trading opportunities and, of course, tightening up stop losses and take profits for such high-risk positions.
UST – Ideal Working Ranges?
On the hourly and four-hour chart of the UST price on the FTX exchange, the support and resistance zones of the price can be clearly traced. On May 26, the price of the asset is in one of the zones of historical interest of buyers and psychological support at $ 0.09 per token. There are other more distinct levels, the key one being $0.06. This level was formed by the asset on the morning of May 13.
After the final strong impulse, which reached a historic low of $ 0.044, and the formation of the Doji candle on the hourly timeframe, a range of candles of the same size was formed, the output and consolidation over which subsequently led to an increase of more than 95% for those who opened long positions. Even more aggressively, it was possible to open a long position on the asset guided by the double bottom pattern, buying UST immediately after the second rebound from the level of $ 0.06 and doji candles on May 13 at 9:00, then the profit at the peak could be phenomenal 250-300%.
The price rebound stopped near the value of $ 0.27 per token, and this level could be conveniently used for profit taking, since it coincided with the once supported level of the worst value of closing hourly candlesticks on May 12. Now this level can be considered as the final and most ambitious point for setting a take profit for swing positions on the asset.
A more likely short-range value of the take profit may be the level near $ 0.13 per token – it was there that the price rebound ended, which began on the afternoon of May 16 and lasted until mid-afternoon on May 18. Then also, having turned around at a historic low, the asset showed an increase of more than 90%.
Where to put a stop loss for such a position depended on the desired level of risk of users: convenient values below the psychological mark of $ 0.05. It is also possible to use values below the historical minimum of $ 0.04.
The safest approach for a set of positions on the UST will be to refuse any purchases now in favor of placing a buy order in the area of the historical minimum, followed by setting a stop loss immediately after it. Minimal risk in this case will lead, however, to a minimum probability of execution of such an order.
USDN – Convenience of Harami Candles?
The USDN chart on the Waves crypto exchange is reversed in comparison with the chart from the previous paragraph about UST. In this part of the text, we talk about howHow much USDN needs to be paid to purchase a more stable USDT roughly equal to the dollar.
Users could observe excellent entry points to transactions, almost like a textbook of technical analysis, on April 4 and 5 at the time of the first serious detach of the USDN rate from the dollar. The four-hour candles on the evening of April 4 and the early morning of April 5 formed a series of inside bars or harami candles , a pattern where several candle bodies fully fit in size into the previous ones. Leaving such a range in either direction on increasing volumes may indicate the direction of subsequent movement.
A position opened at the exit from the range then could bring more than 10% profit even with moderate profit taking upon reaching psychological levels of $ 1.06-1.05, after breaking through which a rapid decline in the price of USDN began.
It was possible to successfully repeat the transaction on the inside bar-pattern in the evening of April 5 on the hourly timeframe. An open position at the exit of the range of harami candles could bring more than 5% profit with exactly the same fixation on the levels described in the paragraph above.
In both cases, an additional important criterion for opening positions was the volume increasing during the start of the movement, as well as the presence of doji candles before the impulse on the hourly timeframe. Many similar setups for opening short-term positions on the asset were presented during the second detach of USDN from the dollar price on May 12, 13 and 14.
Where is the best place to put a stop loss when trading inside bars ranges? Classical theory suggests two options. You can put a stop above the upper limit of the range of harami candlesticks, from which the price has just left in the other direction, or use a trailing stop, dynamically following the price as it moves in the desired direction. The trailing stop functionality, unfortunately, however, is still not available on most crypto sites.
Platform opportunities for additional profit
USDN and UST tokens, which appeared on users’ balances as a result of opening long positions, can also be used to generate additional profits. The FTX exchange allows you to use the UST for margin lending directly from the Portfolio tab, by clicking the Lend button, users will begin to receive payments every hour for providing loans for margin trading of other market participants.
In recent weeks, the annual interest for the provision of UST loans due to the market situation on the asset was extremely high, reaching up to 200% per annum. There is no need to manually set the interest value – the exchange will automatically accrue rewards every hour, taking into account the current value of the percentage per annum at the moment.
USDN tokens on the Waves platform can also be used to generate passive returns, either in staking or to provide liquidity in pairs with other assets, receiving up to 90% per annum.
Despite the attractiveness of the methods of passive earnings described above, it is worth remembering that their use will lead to the loss of the ability to automate the position with orders – users will have to fully monitor the open transaction themselves.
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