Crypto Weekly: Crypto Market Flat and Problems of BitMEX
Bitcoin price fell 2.74% over the last week. Once again, the chart failed to break through the $11,000 level, and fell back to $10,600. At the time of the fall, we observed increased selling volumes, triggering the price fall by 5% within a few hours. However, there are still no major changes in the price of Bitcoin.
In the information field, there were plenty of events. The loudest of them was the suit of the US Commodity Futures Trading Commission (CFTC) and the Department of Justice against the largest derivatives exchange BitMEX. Government authorities accuse the company of violating KYC and AML rules against US citizens. BitMEX claims that it fully complies with all the rules and will prove its involvement in court.
This news triggered Bitcoin’s price drop by 5%. At the same time, users withdrew $43 million worth of Bitcoins from BitMEX in just a day. This is almost 25% of all user funds stored on the BitMEX platform. Open interest in this exchange has also dropped significantly, reaching the values of six months ago.
This incident showed that the US is closely monitoring the cryptocurrency sector and trying to control it. This move indicates the desire of the United States to impose its own rules for companies in the crypto industry.
Another crypto exchange, KuCoin, also issued a statement that it was able to identify the hackers who hacked the exchange and withdrew $280 million. The amount of damage decreased by $64 million, due to the fact that the owners of the exchange were able to block funds in the accounts of attackers, with the help of third-party companies. KuCoin announced that all user losses will be recovered from the insurance fund.
Reading this news, the understanding comes that centralized exchanges are highly vulnerable. This is partly why DEX has become so popular in the last 3 months. Their growth continues to increase exponentially. Thus, it became known that in September, the trading volume on the DEX amounted to $23 billion which is twice as much as it was in August. But back in January 2020, this value was $624 million. Thus, the trading volume on DEX increased by 4,000% in 2020!
Another piece of news is related to Ethereum. Last week, the development team launched a new Spadina testnet to test the creation of a genesis block. However, the team found new bottlenecks at launch, and will now deploy yet another Zinken testnet. Recall that the developers previously want to make the transition of Ethereum to the PoS algorithm in a month — on November 4th.
Bitcoin
Globally, nothing has changed on the Bitcoin chart. The price is sideways, and the volatility is decreasing day by day. This indicates a sharp change in prices in the near future. We still believe that the price will go down to $10,200 first, and in the event of a breakdown of $10,000, it will quickly go to $9,000.
A similar situation occurs with altcoins — sideways and low volatility. The market is in a drowsy state and is preparing for a strong move. Most likely, this will also be a fall, since we are not seeing any preconditions for growth at this time.
