2015 Bitcoin Price Resistance Re-Emerges Amid Bitfinex Controversy

Bitcoin’s failure to hold on to the gains above the 50-week moving average, currently at $5,477, could prove costly. A similar rejection in July 2015 was followed by a sharp sell-off. The daily chart is reporting a bearish divergence of the relative strength index, while short-term averages have shed bullish bias. So BTC could drop below $5,000 over the next few days. The short-term outlook would turn bullish if the crucial 30-day moving average at $4,998 again provides strong support. A long-term technical line, which served as strong price resistance four years ago, is capping the upside in bitcoin’s (BTC) price.
That line, the 50-week moving average (currently at $5,477) was breached earlier this week. The breakout, however, was short-lived with prices falling more than 5.5 percent to hit a low of $4,991 yesterday, possibly due to a controversy involving crypto exchange Bitfinex and the affiliated stablecoin issuer Tether. As reported by CoinDesk, New York’s attorney general alleged that Bitfinex secretly used funds from Tether to make up for an $850 million loss of client and corporate funds. The news renewed concernsregarding the legitimacy of the stablecoin widely used to fund bitcoin purchases, sending both the crypto market leader and tether lower against the dollar.