Bitcoin's downward trend persists
Bitcoin fell to a two-month low yesterday, sliding in three of the last four sessions on nagging regulatory and security concerns after the weekend hacking of South Korean crypto-currency exchange Coinrail.
The original virtual currency is nearing its lowest level of the year of just under $6 000 on the Bitstamp platform. It fell to a low of below $6 500 and last traded down 4.7% at $6 551.48.
So far in 2018, Bitcoin is down nearly 53%, after soaring more than 1 300% last year.
On Sunday, Coinrail, a relatively small crypto-currency exchange in South Korea, said its system was hit by "cyber intrusion", causing a loss of about 30% of the coins traded on the exchange. It did not quantify its value, but local news outlet Yonhap news estimated in an unsourced report that about 40 billion won ($37.28 million) worth of virtual coins were stolen.
The latest hacking wiped out more than $40 billion in the market value of the crypto-currency market on Sunday. Bitcoin itself declined by nearly $1 000.
Bitcoin was able to recover after Sunday's bloodbath on Monday, but it has since continued its downtrend.
"Bitcoin is in a liquidity vacuum at the moment. Volumes on the crypto exchanges are now below $5 billion per day, their lowest levels since November 2017, before things got out of hand," said Israel-based Mati Greenspan, senior market analyst, at eToro.
"As the trading activity is very low, even a small amount of pressure can move the price quite drastically. Kind of like if you hit a baseball in outer space," he added.
Other digital currencies also declined in sympathy with Bitcoin. Ethereum, the second-largest by market value, was down 5% over the past 24 hours to $496.07, while the third-largest, Ripple, lost 4.3% to $0.55, according to crypto-currency price tracker coinmarketcap.com.
South Korea is one of the world's major crypto-currency trading centres, and is home to one of the most heavily trafficked virtual coin exchanges, Bithumb.
Investors and regulators were jolted earlier this year after Japan's crypto-currency exchange Coincheck was hacked in a high-profile theft of over half a billion dollars' worth of digital currency.
Since the beginning of the year, Bitcoin has been trading in a "descending triangle", with important support at $6 500, said analysts at online FX broker FxPro.
A move below $6 500 is a strong technical signal for a sell-off, FxPro said.