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Bitcoin sinks to 2-month low as downtrend persists

So far in 2018, bitcoin is down nearly 53%, after soaring more than 1,300% last year.

Bitcoin medals. Picture: AFP

NEW YORK - Bitcoin fell to a two-month low on Tuesday, sliding in three of the last four sessions on nagging regulatory and security concerns after the weekend hacking of South Korean cryptocurrency exchange Coinrail.

The original virtual currency is nearing its lowest level of the year of just under $6,000 BTC=BTSP 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 cryptocurrency 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 cryptocurrency 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,” Israel-based Mati Greenspan, senior market analyst, at eToro, said.

“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 cryptocurrency price tracker coinmarketcap.com.

South Korea is one of the world’s major cryptocurrency 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 cryptocurrency 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 analysts at online FX broker FxPro said.

A move below $6,500 is a strong technical signal for a sell-off, FxPro said.

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