Are Stablecoins a new way of earning money? How it works

High fluctuations in the exchange 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 — USDN has been detached from the value of the dollar several times, UST is trading ten times cheaper than the dollar, and even USDT, backed by reserves, lost up to 5% of its value at the moment. The above events could become a real tragedy for users who ignored the rules of diversification and used only one stablecoin for all their transactions or savings.

Despite the difficult weekdays for the stablecoin market, at the moments of their greatest volatility, there are also the most opportunities for users with an aggressive trading style to make money on price movements.

Content
Features of the approach and worldview
UST — ideal working ranges?
USDN — convenience of harami candles?
The possibilities of platforms for additional profit
Features of the approach and worldview
Among the most staunch supporters of technical analysis, it is widely believed that in addition to market data, charts and the stock glass, all other information about the asset is superfluous and sometimes even distracting from the main thing. It is difficult to disagree with this at least partially in relation to the crypto market. There are many excellent projects with excellent fundamentals that the market ignores, at the same time, promoted tokens, even without functionality, can grow in price only because there are enough buyers and sellers who create a "wrapper" price.

Trading only on the chart is exactly the approach that should be adopted by users who want to make money on the movement of unstable stables. In this case, the purpose of the token, the team behind it and the development of scandals related to another 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 desired by manipulators.

Having discarded the desire to buy "cheap dollars" for a long time in order to wait for their price to recover, you can look at the price charts of unstable stables from the other side, considering the worked-out patterns of technical analysis, new trading opportunities and, of course, tightening 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, price support and resistance zones are clearly visible. On May 26, the asset price 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 of which is $0.06. This level was formed by the asset on the morning of May 13.

After the final strong downward impulse, which reached a historical low of $ 0.044, and the formation of a doji candle on an hourly timeframe, a range of candles of the same size was formed, the exit and consolidation over which subsequently led to an increase of more than 95% for those who opened long positions. It was possible to open a long position on the asset even more aggressively, guided by the double bottom pattern, by buying UST immediately after the second rebound from the $ 0.06 level and the doji candle on May 13 at 9:00, then the profit at the peak could amount to a phenomenal 250-300%.

The price rebound stopped near the value of $0.27 per token, and this level could be conveniently used to take profits, since it coincided with the once-supported level of the worst closing value of hourly candles on May 12. Now this level can be considered as the final and most ambitious point for setting take profit for swing positions on the asset.

A more likely near-term take profit value may be a level near $0.13 per token — that's where the price rebound ended, which began on the afternoon of May 16 and lasted until the middle of the day on May 18. Then, too, having turned around at a historical low, the asset showed an increase of more than 90%.

Where to place a stop loss for such a position depended on the desired level of risk of users: values below the psychological mark of $0.05 are convenient. It is also possible to use values below the historical minimum of $0.04.

The safest approach for a set of UST positions will involve abandoning any purchases now in favor of placing a purchase order near the historical minimum, followed by setting a stop loss immediately after it. The minimum risk in this case, however, will lead to a minimum probability of execution of such an order.

USDN — convenience of harami candles?
The USDN chart on the Waves crypto exchange is inverted in comparison with the chart from the previous paragraph about UST. In this part of the text, we are talking about how much USDN you need to pay to purchase a more stable USDT approximately equal to the dollar.

Users could observe excellent entry points into transactions, almost as in the textbook of technical analysis, on April 4 and 5 at the time of the first serious detaching of the USDN exchange rate from the dollar. The four—hour candles of the evening of April 4 and early morning of April 5 formed a series of inside bars or harami candles, a pattern when several candle bodies completely fit into the previous ones. An exit from such a range in either direction at increasing volumes may indicate the direction of subsequent movement.

The position opened at the exit from the range then could bring more than 10% profit even with moderate profit-taking after reaching psychological levels of $ 1.06-1.05, after breaking through which a rapid decline in the price of USDN began earlier.

It was possible to successfully repeat the deal on the inside bar pattern on the evening of April 5 on the hourly timeframe. An open position at the exit from the range of harami candles entering each other could bring more than 5% profit with exactly the same fixation at 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 pulse on the hourly timeframe. Many similar setups for opening short-term positions on the asset were presented during the second USDN detaching 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? The classical theory suggests two options. You can put a stop above the upper limit of the harami candle range, from which the price has just gone the other way, or use a trailing stop that dynamically follows the price as it moves in the desired direction. Unfortunately, however, the trailing stop functionality is still not available on most crypto platforms.

The possibilities of platforms for additional profit
The USDN and UST tokens that appeared on users' balances as a result of opening long positions can also be used to generate additional profit. FTX exchange allows you to use UST for margin lending directly from the Portfolio tab, by clicking the Lend button, users will start receiving payments every hour for providing loans for margin trading of other market participants.

In recent weeks, the annual interest rates for UST loans due to the market situation on the asset have been extremely high, reaching up to 200% per annum. There is no need to manually set the percentage value — the exchange will automatically charge rewards every hour, taking into account the current annual percentage value 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 allure of the passive income methods 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.