Cryptocurrency news: Marketwide pullback following Bitfinex allegations

Summary:
-Cryptocurrency exchange accused of covering-up $850 million loss
-Bitcoin trades within an upward channel, Stellar at a crucial level
-Attack on Electrum bitcoin wallet

Cryptocurrency market drops after Bitfinex allegations

New York Attorney General sued Finex Inc - the company behind stablecoin Tether and Bitfinex for hiding loss of $850 million. It is said that the massive loss was covered by Tether’s cash reserves. The charge came to light last Friday.  Bitcoin sank about 6% but managed to close with 2.5 % loss, while the capitalization of cryptocurrencies dropped by about $10 billion, Tether lost 3%. It must be made clear that the stability of Tether helped the coin to become a vital part of the global cryptocurrency ecosystem and it is currently the second biggest cryptocurrency by trading volume

Tether dropped 3% following Bitfinex allegations. Source: CoinMarketCap.com

Bitcoin keeps rising but the latest move towards the lower limit of the upward channel can be seen as a warning signal. From a technical standpoint, an upward move towards the upper limit of the channel ($5750 area) may be now on cards. Note that in case the coin keeps trading within a channel more resistance may surface in the $6200 region, where the lower limit of the June-November 2018 consolidation range is localised. Looking at the market sharp reaction to Bitfinex accusations, in the near future price of Bitcoin might be extremely volatile to another Bitfinex news.

BITCOIN bounced off the lower limit of the upward channel. Source: xStation5

Stellar managed to halted decline at the support zone ranging around the $0.093 handle. The upward trendline running in the very same area provided additional support. Bulls now face the short-term downward trendline. Direction of the break from the wedge pattern may be crucial factor for the near-term price moves.

Crucial time for Stellar. The coin looms break from the wedge pattern with direction of a break being in focus. Source: xStation5

Another attack on bitcoin wallet

The world of cryptocurrency is still vulnerable to hackers, so in the public eye, cryptocurrencies are still considered as a highly risky asset. According to anti-malware software firm Malwarebytes, the number of infected Electrum bitcoin wallets has reached 152,000. It means that Electrum clients lost about $4.8 million. Electrum network was hacked by phishing attacks and the largest concentration of the bots was reportedly located in Brazil and Peru.

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