Bitcoin market update: BTC/USD thrown off balance by Bitfinex and Tether news

BTC/USD one-day consolidation above $5,400 culminated in a sudden slump to the extent that it explored the levels below $5,000. Prior to the consolidation, Bitcoin suffered a flash drop after failing to extend the gains above the new 2019 high. The bears were stopped short of $5,400 giving way to sideways trading with the upside limited at $5,500.

Read more: Cryptocurrency market update: Bullish shoots sprouting again – Bitcoin and Ethereum in the green

Investors on the market reacted to a filing by the New York’s Attorney General’s office that is still investigating Bitfinex exchange for using up to $850 of Tether (USDT) reserve funds to pay customers who were demanding withdrawals. AG’s office has been investigating the exchange company since 2019 but has now asked both Bitfinex and Tether to provide it with specific documents. On the contrary, Bitfinex has said that it will fight the claims and any other action taken by the AG’s office.

Meanwhile, Bitcoin price formed a low at $4,968.39 after the declines slowed down before the close of the session yesterday. A small correction occurred with Bitcoin stepping above $5,100. Support established at this level allowed the bulls to push for gains above $5,250. An intraday high was achieved at $5,286.82 before the price started to trim the gains again.

Presently, Bitcoin is trading at $5,153 while the immediate upside is limited by the 50 SMA 15-minutes. According to the technical levels, Bitcoin is primed for sideways trading in a range between $5,200 and $5,100. We will, however, begin to see sizeable gains after the price completely reclaims the support at $5,200.

BTC/USD 15-minutes chart