Bitcoin (BTC) stable above $5,200 Resolving NY OAG and iFinex differences would be bullish for BTC

The company behind iFinex should quickly resolve their dispute with the New York Office of the AG before fines negatively affect BitFinex and Tether. In a cascade, hefty fines would dent the exchange’s reputation, and because it is where most Bitcoin (BTC) related trading happens, prices would likely drop.

The space is split, and factions are forming around BitFinex, Tether and the parent company, iFinex. With NY OAG breathing fire on iFinex, saying will sue the parent company for alleged fraud; enthusiasts, as well as concerned investors, are going back to the drawing boards. Worse are threats issued by the NY office saying it will dig up more dirt, heaping pressure on the exchange and Tether Limited, which in turn could be catastrophic for asset prices.

If it turns out to be washing linen in public revealing all of BitFinex malpractices, then we shall see more “coin run” from the exchange. Note that despite the accusation of wash trading and now revelation of liquidity problems, the on-ramp is vital in the crypto scene.

1/ Is the #USDT situation going to cause more downside? Based on recent news, it is not too likely. Why? It is a collateralized loan backed by shares from the parent company #iFinex. For now, this provides enough safety for smart money to stay in USDT (market cap remains high). pic.twitter.com/nCbyoYMVtt

— CryptoKea (@CryptoKea) April 26, 2019

As it is, BitFinex is one of the most liquid exchanges, a trusted on-ramp by OpenMarketCap, where Bitcoin’s daily average volume exceeds $44 million. Therefore, as we can see, any shock that would cast BitFinex and USDT in a bad light would suck liquidity out of the exchange triggering unnecessary liquidation.

That no doubt may even wipe gains of early April. Furthermore, since Bitcoin (BTC) is under sell pressure unless when prices close above $6,000, iFinex should resolve their differences with NY OAG before fines affect asset prices.

Despite the drama, Bitcoin (BTC) bulls did reverse Apr-25 losses. Even so, Bitcoin (BTC) is “hanging there” as prices stabilize around $5,200 according to data streams from OpenMarketCap. As it is, BTC is technically bullish. That’s from what we can glean from the weekly chart.

Besides, the fact that the double bear pattern of Apr24-25 didn’t drive prices below $5,000 is bullish. Moving on, every dip is technically another buying opportunity.

In the short-term, there is an opportunity for traders to load up at spot rates with stops at Apr-25 lows at $5,000—that’s just below the middle BB. However, any sell-off driving prices below $5,000 could see BTC drop to $4,500 in a typical retest phase.

Because of Apr-25 losses, the bar anchors our analysis. It has high transaction volumes—21k against 11k. Therefore, in line with our BTC/USD trade plan, bulls will be in control once prices rally past Apr-25 highs with high volumes above 21k. On the flip side, any slump with similar or better volumes would catalyze a sell-off towards $4,500, invalidating our short-term plans.

Chart courtesy of Trading View

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