The crypto market is still in recovery after New York attorney, Letitia James, announced allegations that leading crypto exchange, Bitfinex, had used Tether to cover up an $850 Million loss.
The unconfirmed rumour quickly spread panic throughout the community causing the global crypto market capital to break below $170 Billion momentarily, and Bitcoin to crash by 8%.
Bitfinex has publicly denied the claims in an official response, stating that the NY Attorney General’s allegations were “riddled with false assertions”, and that both Bitfinex and Tether remain “financially strong - full stop”.
Since that development, the #1 cryptocurrency has managed to retrace back to the $5,400 support after springboarding off the uptrending support level. Right now Bitcoin is reporting a marginal 0.78% drop in value against the US dollar, with trading volumes continuing to travel flat.
Despite the asset continuing to make increasingly higher lows as it ascends towards its next major resistance at $5,660, there are a number of worrying signals on the 1D momentum indicators which suggest bulls are beginning to lose their grip on the asset.
BTC/USD Price Analysis
On the 1D BTC/USD chart we can see that the asset has been climbing along a strong uptrending R/S line since April 3, after Bitcoin surged 25%+ to a new 4-month high.
Despite the price action following a clear uptrend, we can see that the 1D RSI and MACD indicators are showing an obvious decline in momentum. This discrepancy between the price action and indicators is usually an early sign of a bearish reversal, as buyers struggle to maintain the uptrend.
The uptrending support level will be the first line of defence for the price action, which could give bullish traders an early opportunity to slow down Bitcoin’s declining value.
If this initial support fails, then it’s likely that BTC will continue to fall towards the next major support zone between the psychological $5,000 level and the $4,660 level (green shaded area).
From there the $4,200 level seems like the next most likely support should Bitcoin continue to plummet.
Bitcoin (BTC) Price Targets
All ROIs are calculated from the asset’s current value at $5,465.00 (AToW).
PT1: $5,000 (-8.51%)
PT2: $4,660 (-14.73%)
PT3: $4,200 (-23.15%)