Summary:
- South Korean exchange shut down after another hacking attack
- SEC temporarily suspends trading of Crypto Company
- Bitcoin lower by 4% on the day. 17400 possible support
There’s been a dual blow to Bitcoin today with news from both South Korea and the US weighing on the crytpcurrency. First off South Korea, where the Youbit exchange has been hacked for the second time in less than 8 months. In April, Youbit, formerly called Yapizon, lost 4,000 bitcoins now worth approximately $73M to cyberthieves. The latest breach has not yet disclosed how much was taken but the firm has claimed that it is around 17% of its assets and subsequently filed for bankruptcy. The news is obviously a blow for the cryptocurrency and serves as a timely reminder as to how vulnerable cryptocurrency exchanges can be to hacking attempts.
Turning our attention to the US, the SEC have announced the temporary suspension of trading on Crypto Company. The stock has been suspended until January the 3rd as the SEC cite an investigation into the accuracy and adequacy of information about the compensation and promotion of the company. The stock has gained an incredible 5644% this year. Whilst the SEC is looking into the stock and not the wider crypto space it is an example of how their reach could be extended with a regulatory crackdown on crypto markets one of the biggest possible factors that could burst the bubble.
The price of Bitcoin has fallen lower today with the market trading lower by a little more than 4% at the time of writing. Whilst these negative news events have seemingly applied downward pressure on price it is worth remembering that they aren’t isolated incidents with there already being numerous reports of hacking on exchanges for instance. However, each negative story could be seen to add to the weight of evidence that suggests the current Bitcoin valuation is exorbitant.
BTCUSD has fallen back towards key support around 17400. The 8 and 21 EMAs have also converged and could soon be seen to indicate the end of the uptrend. Source: xStation
A look at the technicals reveals some interesting developments with price today falling to its lowest level of the week. The 17400 level provided some resistance on the way up and could now be viewed as a possible support. The 8 and 21 EMAs on H4 have converged and are printing a negative cross at present – note the latest candle hasn’t closed yet. For the whole run higher the 8 has remained above the 21 (just) and should this bearish cross be confirmed with price breaking below 17400 then a deeper correction could lie ahead.