A look back over the 2019 charts and some historical data is pointing to a potentially precarious period and possible plunging prices. Couple that with what appears to be some market reaction to the news about troubled exchange Bitfinex, and there appear to be bumps in the road ahead. The enthusiastic leaps of last week as BTC looked like testing the $5,900 level of resistance collapsed with sunken shoulders as news of the Bitfinex scandal in the US broke and, perhaps by coincidence, it fell below the previous resistance level of $5,350 and into the realms of $5,200 where it languishes beneath the troublesome $5,300 line. The news from the New York Attorney General and an accusation that Tether coins were siphoned off to plug a massive $850m hole made by lost funds appear to have dented confidence in crypto, just as bitcoin looked to be making a serious comeback.
Many observers were even claiming the return of a bull market.
Alas, a sharp fall came and, as we saw the close of the April monthly figures which showed an impressive rise in volumes, May begins with something of a ball and chain around its leg.
The start of this new cycle shows all the signs of being a struggle for bitcoin – a little like seeing a football club start a new season on minus 15 points after falling foul of some FA laws in the previous campaign.
The likelihood is that the New York Attorney General isn’t going to let go of the Bitfinex case any time soon, and certainly not during the month ahead.
That being the case, this could set the narrative for the market mood which is currently anything but bullish.
Analysts now fully expect BTC to dip under $5,000 over the coming days and weeks.
This is a movement that would signal the disintegration of a key psychological level that may trigger a dramatic response, one way or another.