If Tether is fully collateralized, then if you sell Tether below 1, the buyer can redeem it for $1 and make an arbitrage profit.
The usual expectation is that arbitrage opportunities vanish as the rush of risk-free profit takers closes the price gap. As such, it doesn't matter what other participants are in the market; the arbitrage buyer is always going to be the best bid below 1.
You might see temporary breaks from the arbitrage-free price due to liquidity (e.g. in a thin market, there might not be enough buyers initially).
If you keep selling, you'll eventually get to a situation where no Tether are in circulation, but every last Tether will sell for ~1.
How do you get the idea that leverage matters here?
If you're long on an asset and are not lending it out, neither short selling nor leverage can hurt you with a fully backed stablecoin – you can always just go to its issuer and redeem it.
As an analogy, consider owning shares of some publicly traded corporation. No matter what happens on the stock market, this doesn't impact your ownership of the actual, physicaly corporation, which entitles you to dividend payments, a proportional share of its assets when liquidated etc.
The usual expectation is that arbitrage opportunities vanish as the rush of risk-free profit takers closes the price gap. As such, it doesn't matter what other participants are in the market; the arbitrage buyer is always going to be the best bid below 1.
You might see temporary breaks from the arbitrage-free price due to liquidity (e.g. in a thin market, there might not be enough buyers initially).
If you keep selling, you'll eventually get to a situation where no Tether are in circulation, but every last Tether will sell for ~1.
How do you get the idea that leverage matters here?