This Tuesday, the well-known virtual currency Bitcoin fell to a two-month low, sliding in three of the last four sessions on nagging regulatory, as well as security concerns, after the weekend hacking of Coinrail, which is the South Korean cryptocurrency exchange.
Coinrail’s system hit by “cyber intrusion”
The cryptocurrency Bitcoin is near to its lowest level of this year, which is just under $6,000 BTC=BTSP on the Bitstamp platform. After that, it fell to a low of below $6,500 and last traded down 4.7% at more than $6,500. So far in 2018, the cryptocurrency was down nearly to 53%, after it soared more than 1,300% in 2017.
This Sunday, Coinrail, which is a relatively small cryptocurrency exchange in South Korea, claimed that its system has been hit by a cyber intrusion, and has caused a loss of about 30% of the coins that were traded on the exchange. It did not qualify its value, but according to the local news outlet Yonhap, the estimates in an unsourced report were that there was nearly 40 billion won worth of virtual coins have been stolen.
The hacking that was latest wiped out more than $40 billion in the market value of the cryptocurrency market on Sunday. Then, Bitcoin itself declined by about $1,000.
The recovery of Bitcoin
However, on Monday, Bitcoin could recover after the bloodbath of Sunday, but since then, it continued its downtrend.
The senior market analyst at eToro, Israel-based Mati Greenspan, said that Bitcoin is in a liquidity vacuum right now. The volumes on the crypto exchange are somewhere below $5 billion every day, marked with their lowest levels since November 2017, before things got out of control.
He also pointed out that, as a result of the low trading activity, even just a little bit of pressure can move the price quite drastically. It is like if you hit a baseball in outer space.
Bithumb, heavily trafficked virtual coin exchange
Some other digital currencies also declined in sympathy with Bitcoin. For instance, according to cryptocurrency price tracker coinmarketcap.com, Ethereum, which is the second-largest by market value, was down to 5% over the past 24 hours to around $500, while Ripple, which is the third-largest by market value, lost 4.3% to about $1.
South Korea is considered one of the main cryptocurrency trading centers in the world, and also the location of one of the most heavily trafficked virtual coin exchanges, known as Bithumb.
Earlier in 2018, investors, as well as some regulators were jolted after the cryptocurrency exchange Coincheck of Japan was hacked in a high-profile theft of over half a billion dollars-worth of digital currency.
FX broker FxPro said that since from the start of 2018, Bitcoin has been trading in a “descending triangle,” with some significant support at $6,500 analysts at online. FxPro also said that a move below $6,500 is a strong technical signal for a sell-off.