Crypto Markets Rebound As Traders Shrug Off Bithumb Hack
An announcement that South Korea-based Bithumb had been hacked affected crypto markets in the early hours of June 20, 2018.
Most coins experienced a price dip during the Asian trading hours and early European times.
However, unlike with past such events, the markets have shrugged off the negative effect, led by Bitcoin (BTC) that is currently trading in the green.
In what will bolster investor confidence and assure would-be institutional fund managers, cryptocurrency prices have shown a steady resilience and could regain a bullish outlook.
It’s encouraging as this comes in the aftermath of yet another hack involving one of the leading cryptocurrency exchanges.
Bithumb’s $30 million hack came right at a time when the market was beginning to form a bullish sentiment. Many investors on social media and chat rooms feared for the worst.
The crypto community has come to expect sharp price declines whenever news of a major exchange being hacked reaches the market.
However, this time it looks different as whatever effect it had was only minor and prices dropped less than 3 percent for most cryptocurrencies.
The latest exchange hack, though affecting a leading platform, hasn’t had a major impact as did Coinrail.
The latter is a smaller platform, but a heist of about $40 million in crypto assets left the market reeling from double-digit price declines.
The “Bloody Sunday” as it was called, saw every coin in the top markets lose over 10%.
By then, the overall sentiment had been trending south for days, and the negative news only exacerbated the situation.
So, is the market becoming stronger, mature? It appears so, as LTC creator Charlie Lee points out- crypto assets will definitely rebound from this.
Bitcoin (BTC) holds firm
Before Bithumb news reached the market, BTC/USD traded at about $6,772 on Binance. The announcement had an immediate impact, plummeting prices to a low of $6,550.
However, the market rallied soon after, reaching a high of $6,811.
At the moment, Bitcoin market indicators favor a correction towards breaking above $7,000.
If it breaks above this level, the next resistance area will be at $7,500 and then $7,700. At the moment, though, Bitcoin bulls are fighting to break the key resistance line at $7k.
It’s common that Bitcoin still holds sway on prices of other cryptocurrencies and its short-term bullish outlook may be vital for all other coins.
The leading crypto’s technical indicators show that it has formed a rounding bottom. The effect is that sentiment is drifting north, away from the bearish zones.
If BTC stays within the bullish territory, other virtual currencies will likely hold above current support zones
Other coins rally
Similar trajectories are replicated by the rest of the top 10 coins. Ethereum (ETH), Ripple (XRP), and Bitcoin Cash (BCH) are all trending in the green as bulls marshal support to bolster further upside momentum.
Among those coins to show greater resilience are Ethereum Classic (ETC) that’s trading 14% and 24% higher over the last 24 hours and 7 days respectively.
TRON (TRX) too has stayed in the green, 8% higher in the last 24 hours. All the coins in the top markets are having a slight upturn (above 3%), and could yet rally to put the latest setback behind them.
The belief is that Bithumb may have played a role in stemming any further damage by offering to cover all the losses.
Many hold the opinion that the hack is an unfortunate incident, but Bithumb will comfortably be able to cover all losses given they make profits upwards of $300 million.
Price movements can be exaggerated though depending on the underlying sentiment of the market.
With the Coinrail incident, prices had been falling steadily before the hack whereas prices had just started to move up in the days before the Bithumb hack.
Even though current movements indicate a positive outlook, the Bithumb hack hasn’t been completely disclosed.
Once it’s made clear what currencies were stolen, the market could witness another slight dip. What’s buoying investors is the continued show of resilience.
If prices hold and an upturn materializes, the market will have put Bithumb misfortunes behind it.
The only question that remains is whether there’s enough support to see prices rally. The next few days will be vital in answering that question.