Technicals Don’t Look Too Hot For Bitcoin
Yesterday, Tuesday, saw world-renowned crypto exchange Binance get hacked for 7,000 Bitcoin (BTC), valued at $41-odd million at current valuations. For those who missed the memo, here’s a brief recap.
As reported by Ethereum World News previously, Binance’s Changpeng “CZ” Zhao suddenly shut down deposits and withdrawals on Tuesday, citing maintenance that was “unscheduled”. This came as a surprise to some, as the platform’s track record for announcing maintenance sessions was impeccable. Yet, CZ assured that “Funds are #SAFU,” referring to a crypto meme/inside joke that has become Binance’s favorite.
Hours later, however, Binance released a revealing blog post in which it was revealed that a hack had occurred. It was divulged that “hackers”, which remain unnamed, were able to obtain a large number of user API keys, two-factor authentication codes, and “potentially other” tidbits of information, giving them access to users’ accounts, even withdrawal permissions. Binance reports that the malicious group/entity used a serious of techniques to get their hands on this information, including phishing, viruses, potentially the extremely devious SIM swapping technique, and “other [vectors of] attack.”
As this news broke, BTC fell. In the thirty minutes after the release of the aforementioned blog, Bitcoin dropped from $5,925 on Coinbase to $5,720, a drop of around 3%. However, since then, BTC has recovered. Yet, some are sure that the cryptocurrency is currently bearish from a technical standpoint.
In a tweet posted following the hack, Financial Survivalism, an analyst that has forecasted a BTC drop to sub-$2,000 levels before, explains that there are a number of technical indicators acting as clear red flags. The daily TD sequential recently printed a red 9, just days after a “combo 13”, signaling an impending bearish reversal. What’s more, Bitcoin has seen a so-called “shooting star reversal doji” candle after testing major resistance, the upper bound of BTC’s medium-term trend line, hinting that bulls aren’t in full control yet.
According to multiple sources @binance has been hacked for approximately $40,000,000. The daily just closed a red 9, following a combo 13 & shooting star reversal doji after testing major resistance. I think that its high time to open some short positions. https://t.co/yRUEzWX6pu pic.twitter.com/JCgdesoB0f
— Financial Survivalism (@Sawcruhteez) May 8, 2019
Survivalism isn’t the only commentator bearish. Trader Walter Wyckoff notes that Bitcoin’s chart isn’t as hot as optimists think. He claims that there are bearish divergences on the Relative Strength Index (RSI) and the Network Value to Transactions (NVT) ratio, adding that this coupled with Bitcoin encountering key resistance at $6,000 “begs some caution”. This quip comes just days after Magic Poop Cannon made a similar noticing, also looking to the fact that BTC’s NVT means that the asset may be overextended.
Thoughts on $BTC right now. Bearish divergences on RSI and NVT Signal, that alone may not mean anything, but coupled with yearly resistance begs some caution, since BTC 2xed in the previous months. Either break and retest or rejecc, not in any rush to long 5900$ tbh pic.twitter.com/gOSgWC8HdU
— Walter Wyckoff (@walter_wyckoff) May 8, 2019
A Silver Lining
There is a silver lining though. As popular researcher Alex Kruger astutely points out, Bitcoin has “stopped caring about bad news”. He cites the chart below as a perfect case in point.
While the bouts of bad news, like the aforementioned Binance hack and news that Tether is unbacked, did temporarily hurt BTC, the market has quickly recovered in all cases. This, in the eyes of Kruger and other analysts, is a sign that Bitcoin is decidedly in an uptrend.
Photo by Dmitry Moraine on Unsplash