A tough week for the broader cryptomarket saw just a handful of the crypto majors gain ground, while Bitcoin was left trailing, a 0.15% fall on Sunday leaving Bitcoin down 1.52% at $6,490.2 for the week.
Rising to a morning high $6,513.9 saw Bitcoin fall well short of the day’s first major resistance level at $6,519.07 before easing back to sub-$6,500 levels, which has become the new line in the sand for the Bitcoin bulls and bears.
An afternoon sell-off saw Bitcoin fall through the day’s first major support level at $6,463.17 to an intraday low $6,451 before testing resistance at $6,500 late in the day, with Bitcoin unable to hold on to $6,500 levels at the end of the day, following a late move through to $6,502.
On the news front, reports of a Bitcoin exchange being hacked in Canada will have been a negative, with all funds on the exchange reportedly stolen, though there are suggestions across the news wires that this was an ‘exit scam’ rather than an actual hack, meaning that the owners of the exchange have run off with the money.
The latest scandal, albeit smaller than the likes of the Mt Gox event, provides further justification to regulators to insist on appropriate controls and mechanisms including custody that would ultimately prevent such events from taking place.
For the investor, there are frequent warnings of leaving cryptocurrencies on the exchanges and not in wallets with private keys that would prevent loss of funds, the latest theft, whether a hack or an exit scam being a reminder to those that continue to assume that the market and exchanges are heavily regulated.
While Canada falls outside of the purview of the SEC, which is currently in the process of reviewing the 9 Bitcoin ETF applications that were submitted through the summer, the threat of theft or hack is ever present and would certainly need to be a part of the SEC’s mandate. Perhaps the current lack of volatility may ultimately wash away some of the smaller crypto exchanges that are not in it for the long haul and lack the funds or the know-how to meet any regulatory requirements that may be imposed by governments and regulators in the market’s next phase, ‘The Regulatory Overhaul.’
At the time of writing, Bitcoin was up 0.16% to $6,500.6, with Bitcoin recovering from an early morning low $6,478 to a morning high $6,512 before easing back, the range bound moves through the morning seeing the day’s major support and resistance levels left untested early on.
For the day ahead, a move back through the morning high $6,512 would support a run at the first major resistance level at $6,519.07, while we would expect Bitcoin to struggle to break out to bring the second major resistance level at $6,547.93 into play, with Bitcoin expected to continue facing plenty of resistance at $6,500.
Failure to move back through the morning low could see Bitcoin give up $6,500 levels and ease back through the morning low $6,478 to call on support at the first major support level at $6,456.17 before any recovery, the second major support level at $6,422.13 unlikely to be tested on the day.
Market impatience could begin to kick in that would support a further downward bias should Bitcoin fail to make a move, though the Bitcoin bulls may be biding their time, with Bitcoin’s 10th birthday on Wednesday a day where Bitcoin may be set free from the shackles.