Here everything is about the trust!
As is evident in the name, Stablecoins are coins with stable prices. The primary usage of these coins is in trading. Due to their stable prices, no one buys them to gain from the price increase. However, to trade and buy many cryptocurrencies, you need to buy stablecoins first.
For example, if you want to trade or invest in an altcoin that your bank or gateway to enter the broker platform does not support; therefore you need to buy a stablecoin, move it to your wallet and then buy the coins that you wish to have.
Stable coins can be based on Algorithm and/or backed by assets. The backed assets also could be Bitcoin, Gold, or fiat money. So, in fact, stablecoins can not directly change the price of any crypto; however, the large volume of these stablecoins in the market affects the market trust and capital outflow from this market.
We can analyze it better when looking at what happened to TerraUSD and the reaction of the cryptocurrency market. For example, if you had a Bitcoin, and TerraUSD fell to 0.15 USD, down from 1 US Dollar, nothing happened for BTC security or its network, transaction system, etc. Nevertheless, despite all these, it was one of the reasons that we saw the BTC under 26,000 US dollars as well. Everything is about trust here, and prices will be short when you see that loss.
Technically, BTC is moving in a clear downtrend, incredibly long as it moves under 37,500 USD. Also, a return under 29,000 can sharply increase the risk and fears and open the doors for lower numbers. In the short term, buying in deep was one of the main reasons to pause the bears. Nevertheless, will that be enough to reverse the trend as well or not is the central question for now? Technical indicators remain bullish in day trading charts, but bears have complete market control in middle and longer-term charts.
