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Short-Term Bearish Case Strengthens
BTC: Price: $5,170 | MCAP: $93.52 billion | 24-Hr Volume: $17.98 billion
Short-term trend: Bearish
Bitcoin fell more than 5 percent to print lows below $5,000 on Thursday, possibly due to allegation by New York's attorney general that Bitfinex raided funds from Tether to cover up $850 million loss of client and corporate funds.
The sell-off reinforced the bearish view put forward by the 14-day relative strength index's bearish divergence. Further, short duration averages have shed bearish bias.
As a result, the bounce from yesterday's low of $4,991 to $5,200 could be short-lived and prices may find acceptance below $5,000 over the weekend.
Also, it is worth noting that the cryptocurrency faced rejection at the 50-week moving average earlier this week. That is a cause of concern for the bulls, as similar rejection in July 2015 was followed by a sharp sell-off.
Read: How Crypto Markets Are Reacting to the Tether-Bitfinex Allegations
Long-term trend: Bullish
Bitcoin’s 14-week relative strength index (RSI) moved above above the key resistance range of 53.00–55.00 earlier this month, validating the longer-term bullish reversal signaled by a falling channel breakout witnessed two weeks ago.
Supporting the longer run bullish case is the two-week MACD histogram's positive turn, the first since February 2018.
The longer run bullish outlook would be neutralized if the price finds acceptance below the 200-day MA, currently at $4,482.
Read Analysis
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Tether Clout Provides Opportunities PAX: Price: $1.04 | MCAP: $116.01 million | 24-Hr Volume: $210.5 million
Short-term trend: Neutral
The markets have been shook by recent Bitfinex and Tether news that saw Tether's price once again drop well below parity with the US Dollar at $0.97 creating a disparity in value among the top stablecoins
PAXOS Standard Token is no exception and is one of today's top gainers among other stablecoin assets, up 1.57 percent amid the Tether and Bitfinex clout.
Long-term trend: Neutral
Prices are likely to retrace back to near parity in the coming weeks once the fallout and dust has settled from yesterday's recent events. However, it will be interesting to see how the case against Bitfinex by the NY Attorney General's Office plays out.
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Maker Hasn't Made it Yet MKR: Price: $493 | MCAP: 493.3 million | 24-Hr Volume: 2.8 million
Short-term trend: Bearish
MKR has experienced a 12.76 percent drop over a 24-hour period amid a greater market sell-off produced considerable bearish market conditions across the board.
Yesterday's drop also brought MKR's price below the crucial 61.8 percent Fibonacci retracement level, which under more bullish circumstances, would normally produce a bounce from that zone.
If conditions fail to improve for the bulls consider the 78.6 percent Fibonacci retracement as the next area of major support at $419.
Long-term trend: Bearish
MKR has retraced below its Dec. peak highs of $538 confirming the breakdown from what had been a bullish market formation of higher highs beginning Dec. and ending April 11 with a fresh local low and disrupting the potential to push higher in the long-term.
Furthermore, MKR has dropped below its 200-daily moving average, used to gauge long-term market sentiment, as it firmly closed below that line yesterday at $565 flagging a bearish flip.
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@thetokenanalyst is associating the big spike in ether (ETH) outflows from Bitfinex wallets with Tether cover up allegation by New York's attorney general.
There is merit in his argument, as the outflows gathered pace immediately after the major media outlets reported on the Bitfinex controversy just an hour or so before UTC midnight yesterday.
The outflows are hardly surprising, as the allegation that crypto exchange Bitfinex secretly used funds from Tether to make up for an $850 million loss has renewed worries regarding the regarding the legitimacy of the stablecoin tether.
That said, controversy is certainly nothing new to twitter. Its claim of being fully backed by reserves is often questioned by pundits.
So far, however, markets have paid little heed to such doubts. It is worth noting that the stablecoin is widely used to fund cryptocurrency purchases. Hence, a loss of confidence would be a major blow to crypto markets.
Read: Bitfinex Covered $850 Million Loss Using Tether Funds, NY Prosecutors Allege |
Bitcoin dropped more than 5 percent yesterday (UTC), possibly due to a controversy involving crypto exchange Bitfinex and the affiliated stablecoin issuer Tether.
Despite the price drop, bitcoin’s implied volatility gauge has barely moved, as seen in the above tweet.
Implied volatility shows the market's opinion of bitcoin's potential move, but doesn't predict the direction.
The fact that volatility gauge saw little action indicates the investors are digesting the tether news pretty well.
It is worth noting that implied volatility typically goes up during the bear markets, when investors believe the price will decline over time.
So, lackluster activity in the implied volatility could be considered a sign investors are viewing yesterday's price drop as a one-off event.
That said, the volatility gauge may pick up if the price finds acceptance below the psychological support of $5,000. |
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| Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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Not So 'Stable'coin