- BTC/USD is rangebound with a bearish bias.
- The sell-off may gain traction with the next aim at $7,875.
- The rally might have been caused by Bitfinex-related capital flight.
Bitcoin is back at $8,000 after a short-lived move towards $8,400. The first digital coin has entered a consolidative phase with a bearish bias as the market is not ready to push it above the critical resistance. Moreover, Bitcoin’s market share dropped to 55.3% on Thursday as altcoins are doing better with double-digit gains on a day-on-day basis.
Meanwhile, the recent Bitcoin growth may have been exaggerated Bitfinex-related issues, according to the latest research conducted by a blockchain data provider TokenAnalyst. The company’s experts believe that the upside is partially caused by capital flight from the exchange amid Bitfinex-Tether scandal. The research shows that traders withdrew over $622 million over the past five days from such cryptocurrency trading platforms as Bitfinex, BitMEX, Binance, and Kraken.
“Since Tether is insufficiently backed, it means that some of the reserves backing customer assets on exchanges are likely insufficient. So smart customers will not custody their funds on exchanges and pull their crypto off exchanges. This could put further upward pressure on Bitcoin prices as one would rather take fake money and exchange it to Bitcoin,” John Griffin, a finance professor at the University of Texas at Austin, commented.
BTC/USD, the technical picture
The local support for BTC is created by the middle line of the 4-hour Bollinger Band at $7,875.
Once it is cleared, the sell-off may continue towards $7,161 (the lower boundary of the above-said Bollinger Band), followed by psychological $7,000, which is strengthened by SMA50.
On the upside, the recovery is capped by $8,378 (upper line of Bollinger Bands on 1-hour chart) followed by critical $8,400.
BTC/USD, 4-hour chart
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