Bitcoin (BTC) Price News: Binance is Back, Chinese Driving the Rally and an 80% Drop Incoming?
After more than a week with suspended activity following a hack that saw $40 million worth of Bitcoin stolen from its exchange, crypto exchange giant Binance is finally back online. The exchange immediately suspended all deposits and withdrawals after hackers stole 7,000 BTC from the platform, although trading was still operational. It then spent the past few days working on an upgrade to its systems to improve security, during which there were times that the entire platform was offline.
Now, Binance is finally back up and fully operational. As an apology to its loyal customers, Binance CEO Changpeng Zhao (CZ) announced that the exchange will be giving away $1.2 million worth of Binance Coin (BNB) tokens. 50,000 BNB tokens will be split between all users with 1 BTC or more of valid trading volume (across all trading pairs).
Are the Chinese buying Bitcoin as a Safe Haven?
When Bitcoin’s recent rally kicked in this past weekend, speculation abounded regarding the U.S.-China trade war as a possible instigator. Many blew off the theory as mere speculation but now it seems there may have been some legitimacy to it. Yesterday, Jeff Kauflin of the American business powerhouse Forbes posted an interesting article revealing a relationship between the U.S.-China trade war and the recent 40% Bitcoin price hike.
It would seem that wealthy Chinese investors, fearing for a drop in their local currency, are pumping their Chinese Yuan (RMB) into Bitcoin as a safe haven. Popular Twitter commenter and Primitive Ventures co-founder Dovey Wan reiterated the feelings in a post comparing Bitcoin and the US/RMB exchange rate. Despite efforts by the Chinese government to restrict the sale of Yuan, several sources on the ground confirm that traders aiming to get money out of the country.
Are we in for an 80% Correction?
Sudden and unexpected price hikes like we are seeing now always attract a fair level of skepticism and this time is no different. Ever since Bitcoin accelerated past previous highs of $6,400 and broke through $7,000 hours later, analysts have been calling a correction. Despite the unsustainable rise, Bitcoin has managed to continue its upward trajectory for almost a week now, reaching highs of $8.350 earlier today – its highest level in almost a year. So is the big crash coming?
A Twitter user by the name Throwaway (@hithrowaway) seems to think so. In a tweet posted two days ago, he points out the correlations between indicators today and three previous times that Bitcoin has suffered a strong correction. He notes in his analysis that the weekly RSI, MFI and NVT indicators for Bitcoin are all simultaneously overextended – a situation that resulted in more than an 80 percent price drop in each previous instance.
Since his post, Bitcoin’s gains have leveled off and the asset appears to have entered a period of consolidation. Will a differing financial and technological landscape this time around help keep Bitcoin afloat? Twitter user @RhythmTrader seems to think so.