Cryptocurrencies went down in value last night after the New York Attorney General's court filings against Bitfinex and Tether were released. Currently, the entire market capitalization is around $170 billion and many cryptocurrencies have surrendered 2-10% of their value since the announcement.
NYAG Announcement Creates Crypto Market Uncertainties
On April 25, the New York Attorney General's (NYAG) office released a court order that declared the cryptocurrency exchange Bitfinex lost $850 million and manipulated Tether to cover the loss. NYAG Letitia James explained her department found inconsistencies and the parent company of both Bitfinex and Tether “engaged in a cover-up to hide the apparent loss of $850 million of co-mingled client and corporate funds.”
Bitfinex has responded to the accusations stating: “The New York Attorney General's court filings were written in bad faith and are filled with false assertions, including as to a purported $850 million “loss” at Crypto Capital.”
Armchair sleuths also noticed that 550 BTC ($1.6 M) that were tied in with the 2016 Bitfinex hack began moving quickly after the NYAG filing.
Cryptos See Slight Recovery After the Losses
With all the controversy encompassing Bitfinex and Tether, the crypto market observed immediate losses and bitcoin core (BTC) dropped to $5,005 per coin on Thursday. The whole ecosystem trembled for a few hours however many coins have reclaimed some momentum. Currently, bitcoin core (BTC) is trading for $5,285 but is down 3.6% in the last 24 hours.
This is accompanied by ethereum (ETH) which is down 5.5% today and trading for $155 per ETH. The third highest market valuation comes from ripple (XRP) and the digital asset has lost 2.9% over the last day and trades for $0.29. And lastly, the fifth biggest market litecoin (LTC) is down 2% this Friday and is trading for $72 per coin. At the moment of publication, there's about $57 billion in global trade volume between all the coins in the cryptoconomy. On Thursday evening, tether (USDT) fell below its $1 peg and has found themselves in a slump since the statement.
Bitcoin Cash (BCH) Market Action
The 4th highest market capitalization is connected with to bitcoin cash (BCH) which is down 5.6% this Friday. BCH is switching for $265 per coin and has a market valuation of about $4.7 billion. Bitcoin cash is the sixth most traded cryptocurrency by volume on April 26 above XRP and below EOS. Data also show that BCH has about $1.36 billion in global trade volume. The major five trading platforms swapping the most BCH are Coinebene, P2pb2b, Fcoin, Lbank, Bitmart, and Bitforex. The top currency pair with BCH is tether (USDT) which captures 48.2% of trades. Tether's pair dominance with BCH is followed by BTC (34%), USD (9%), KRW (4.2%), and the EUR (1.1%). Data also shows that ETH, JPY, and the two stablecoins PAX and TUSD follow behind.
BCH/USD Technical Indicators
Examining the BCH/USD daily and 4-hour charts reveal that resistance has been built in the middle of the Bitfinex and Tether headlines. Technical indicator gauges featured prove that oscillators are yelling oversold conditions while at the same time most moving averages show either uncertainty or strong positions to sell. Currently, the two Simple Moving Averages (SMA) seek to cross hairs as the 100 SMA is heading southbound. This suggests the path towards the least resistance is still the upside but may alter shortly. The MACd, a momentum oscillator that takes out the longer-term moving average from the shorter-term moving average, suggests prices might dip lower in the short term.
Bollinger Bands were tighter last week but have started to widen after news of the selloff. The Ichimoku Cloud (9, 26, 52, 26) baseline is neutral right now but most moving averages indicate a bearish divergence. Looking at order books shows some deep resistance above the $280 zone and more pit stops around $300. A lot of foundational support has built up over the last few weeks so if bears get hold of the reins they will see resistance between now and the $230 zone.
The Verdict: Uncertainty Shows its Face Again
In the aftermath of the Bitfinex and Tether headlines, it's sure to say anxiety is in the air once more and the prior bullish exuberance throughout the community has begun to fade. It's at the same time intriguing to note that cryptocurrency prices have diverged a fair bit over well-known exchanges and trade volumes also kicked into high gear.
USDT remains a dominant pair, pulling in excess of 60% of the whole cryptoconomy and 71% of BTC pairs according to Coinlib.io and Crypto Compare statistics. Bitcoin cash (BCH) has held fairly steady ever since the announcement but fell short to hold above the 50-week moving average.
Nonetheless, there are many other technicals that could come into play within the digital asset space in the short-term. It's safe to say the weekend and next week will determine if crypto markets were undeniably affected by the NYAG's court filings and whether or not the controversy could affect prices again.
Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice.
Images via Shutterstock, Trading View, Bitcoin.com Markets, and Coinlib.io.
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