An exchange hack in S. Korea sent the price down sharply on Sunday

The price of Bitcoin (on Coinbase) has been relatively quiet in trading today, the high reached $6839.29. The low extended to 6666.66 (that's a lot of sixes). We currently trade between the extremes at $6751, up $31 on the day.

However, the action was over the weekend when the price tumbled from a close on Saturday at $7496 to a low of $6652. That is a -11.2% decline to the lows. From the weekend high at $7680, the decline was -13.7%. That can ruin your weekend.

The catalyst was a hack of a S. Korean exchange, Coinrail. The reported loss was $42 billion won. This is not a heck of a lot (around $38 USD). There have been bigger hacks (there was a $500 million theft in January from a Japanese exchange), but the precedent that hacks can occur, is a chink in the Bitcoin armor.

Other news that may have contributed to the decline is that China will continue to crack down on bitcoins and initial coin offerings. China - and other countries - are concerned about not only theft, but market manipulation, fraud and money laundering.

Technically, looking at the hourly chart above, the digital currency traded above and below its 100 and 200 hour MA last week with confined ranges (see blue and green lines).

On Sunday, the price moved below the MA lines with more momentum (blue and green lines in the chart above) at the $7603 area, and also a trend line at $7532. That ignited selling that did not stop until the $6652 low.

Now the price is consolidating with little bounce since then. The $6810 is a topside trend line that is a close risk/bias change level. The high corrective price since the low reached $6868. Getting above each could solicit a corrective move higher. Until then (and that is the minimum), the sellers remain more in control and the buyers/longs remain nervous/anxious/scared..

Taking a broader look at the daily chart, the price has not closed above the 100 day MA (blue line) since breaking below back on May 10th. That's bearish.

Prior to that break, the 200 day MA (green line in the chart below stalled the rally on three separate tests (see green numbered circles). The price has not closed above the 200 day MA since March 11th. That's bearish too. Both daily moving averages have helped to keep the sellers more in control from a longer term perspective.

Targets off the daily come in at the swing lows at:

  • $6450. April 2018 low
  • $5873. February and 2018 low
  • $5511. November 2017 swing low.

SUMMARY:

Bears are in control on the hourly chart for bitcoin, with close risk levels at $6810 and $6868 into the new day.

Bears have helped the bearish bias on the daily chart, with downside targets more a focus on that chart. The next target is the $6450 with the 2018 low at $5873 not out of the question.

Be aware.