BITCOIN TRADES IN RANGE AS FSA STARTS PROBE ON ZAIF HACK
This month, Bitcoin reached a high of $7337 before a sharp decline that saw it fall to a low of $6020. The lower level was higher than August’s low of $5813.
September has been a worrying month for cryptos to date. First, there was a major hacking of a Japanese exchange, Zaif, which saw more than $60 million stolen. Yesterday, the main Japanese watchdog gave Zaif a third official warning and demanded more information regarding the incident. The regulator asked the company how the hack took place and how they plan to compensate the people whose funds were stolen. The Financial Service Authority (FSA) also wants to know why there was a delay in reporting the hack. A sustained legal case between the FSA and the company will mean more trouble for Zaif because of the heavy fees and compensation requirements.
Yesterday, Michael Novogratz who runs a crypto asset management company said that Bitcoin was set to start moving higher as more institutional interest comes in. However, such statements should be taken with a pinch of salt because of a conflict of interest with Novogratz likely to benefit when the price goes up. The reality is that there is no such large interest from institutional investors. In fact, when Bitcoin futures started trading at CME and CBOE, many expected its demand to rise. It did not and in fact, more institutional traders opened sell trades.
The BTC/USD pair is trading at 6442, which is along the 23.6% Fibonacci Retracement level and headed lower. A lower trend below this level will see the pair test the 6000 level. Upside movements, on the other hand, will see it test the 38.2% Fibonacci level at 6800.