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Bitconnect Shuts Down Its Exchange Citing a String of Excuses

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bitconnect shutdown 1068x1068 Bitconnect Shuts Down Its Exchange Citing a String of Excuses



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In a move that will surprise few observers, Bitconnect has announced that it is closing its lending and exchange platform. The company has widely been accused of operating a Ponzi scheme and was recently rocked by cease and desist notices in two US states. Immediately after the firm declared its intention to wind things up, its BCC coin plummeted from $290 to under $10 before recovering slightly. With the exchange offline, many holders have been left locked out and powerless to sell their heavily deprecated assets.

Also read: Bitconnect Slapped with Securities Emergency Cease and Desist Order

Bitconnect Bids Bye Bye

Pressure has been mounting on Bitconnect for months, with leading figures within the crypto community, from Vitalik Buterin to Jameson Lopp, speculating that the exchange was not all it was cracked up to be. News.Bitcoin.com reported on these rumors back in November before revealing, less than a fortnight ago, that the company had been slapped with an emergency cease and desist order in Texas. Among many red flags to have set alarm bells ringing were Bitconnect’s extremely odd marketing videos, described by one commenter as being “like scientology merged with hillsong infused with dorks and used car salesmen”.

bitconnect live 1024x580 Bitconnect Shuts Down Its Exchange Citing a String of Excuses

In an update posted on the Bitconnect website, the company said it was halting its lending and exchange service due to the spate of cease and desist notices coupled with “bad press” and a string of DDoS attacks. Unfortunately, due to the ongoing DDoS attacks, the blog post can’t be accessed at this time. The “bad press” that Bitconnect cites, otherwise known as accurate reporting, has been invaluable in helping guide crypto newcomers away from the platform.

lopp bitconnect 1024x840 Bitconnect Shuts Down Its Exchange Citing a String of Excuses

A Secret Blend of Herbs and Spices

The exact workings of Bitconnect’s secret sauce that purportedly makes its investors generous returns has never been disclosed, but the general consensus is that the whole operation is little more than a pyramid scheme. It is almost certain that Bitconnect’s “intelligent trading bot” which makes profitable trades and then shares those dividends with the community, does not exist.

bitconnect statement Bitconnect Shuts Down Its Exchange Citing a String of Excuses
The Bitconnect statement in full

It is not clear whether the news of Bitconnect’s lending service shutdown heralds the end of the company altogether, although it is hard to imagine it being able to limp on in any shape or form after shuttering its main hub. DDoS attacks are a tactic that a number of deep web marketplaces have used to sow confusion ahead of an exit scam. It is impossible to ascertain the origins of the distributed denial of service the site is under, though it it is not beyond the realms of possibility that the attack may have originated from close to home.

bitconnect coincodex 1024x610 Bitconnect Shuts Down Its Exchange Citing a String of Excuses

Bitconnect Token Falls Through the Floor

Historically, Bitconnect’s BCC token has been remarkably stable, maintaining steady growth in a pattern not dissimilar from that of bitcoin. But as news.Bitcoin.com noted back in November:

With most of the BCC in existence locked in the company’s exchange, if its founders were to perform an exit scam or wind up behind bars, millions of dollars of bitcoin would instantly be locked up and BCC would be rendered worthless.

That prophecy has now come to pass. Coinmarketcap reports zero trade volume on the Bitconnect platform in the last 60 hours, leaving its token still listed at $290 there. On other platforms though, such as Coinexchange, which recorded 24-hour BCC trade volume of $1.26 million, the token dropped to $8 before recovering to around $25 at the time of publication. Coinmarketcap, the web’s go-to cryptocurrency checker, has previously come in for criticism for hosting ads promoting Bitconnect. Coincodex, in comparison, has elected to post a notice alongside BCC warning investors away. Its CEO Marko Stokelj previously told news.Bitcoin.com:

Bitconnect employs a number of dubious methods in order to operate and promote its business. The business model outlined by the company is economically unsustainable with the current level of returns unable to be validated by any legally known investment system.

While some observers in the crypto community may feel a touch of schadenfreude at Bitconnect’s demise, it is worth being mindful of the many victims who will have suffered heavy losses. Thanks to its marketing strategy, including use of referral schemes, Bitconnect preyed on newbs who lacked the necessary understanding to differentiate legitimate cryptocurrencies from get rich quick schemes.

bitconnect twitter 1024x664 Bitconnect Shuts Down Its Exchange Citing a String of Excuses

If the news emanating from Bitconnect’s 404’d website does prove to be terminal – and it’s hard to imagine the company coming back from this – there will at least be some good to come out of this story. A number of similar sites with names such as Ethconnect have appeared in recent months, each with the same opaque business model. The fall of Bitconnect will hopefully serve as a warning to other crypto startups not to go down the same route. For Bitconnect bag-holders, though, this cautionary tale will provide little consolation.

UPDATE: This post has since been updated to include a screenshot of the Bitconnect statement in full.

Do you think today’s news spells the end for Bitconnect? Let us know in the comments section below.


Images courtesy of Shutterstock, Coincodex and Coinmarketcap.


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Bitcoin Sees Lower Lows as It Drops Below Historic Support

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Over the last couple months, we’ve been tracking a potential Distribution Trading Range at the top of bitcoin’s market cycle. Today, we have received higher confidence that bitcoin may have topped out. At around 3:00 p.m. EST, bitcoin broke through the bottom of the trading range and is now seeing aggressive selling as long positions begin to close and short positions begin to open. Today marks the first day of lower lows since bitcoin topped out around $20,000:

Figure 1 9nwliyP.original Bitcoin Sees Lower Lows as It Drops Below Historic SupportFigure 1: BTC-USD, 4-Hour Candles, Distribution Trading Range

Bitcoin managed to blow through several milestones including both the parabolic and the linear trends. The linear and parabolic trends have been guiding trends for the last three years, and today bitcoin has broken parabolic support. It could get ugly:

Figure 2 v9yQBgu.original Bitcoin Sees Lower Lows as It Drops Below Historic SupportFigure 2: BTC-USD, 1-Day Candles, Macro Trend

What was once strong support has now become resistance as bitcoin scrambles to find a bottom. We can see quite clearly there is a line of support around $10,000 where the macro Fibonacci retracement values for the 50% retracement line exist. Any downward continuation will likely be supported in the interim. However, it’s fair to say that bitcoin is beginning a new downward trend. As stated earlier, today marks the first day of lower highs and lower lows — i.e., a downtrend.

So where does the bottom lie? That remains to be seen. What is clear, however, is that there was a systematic distribution of bitcoin from large players to the masses; and now we are beginning the next phase of the market cycle — the markdown phase. Will it be a sustained markdown? It’s too early to tell at the moment, so we will have to play it by ear.

Bitcoin is a long-time fan of violent drops and violent bounces, so it’s unclear how this downtrend will terminate. For now, I highly recommend traders stay away from smaller time frames and focus more on the macro view of things.

As we come to test the macro 50% retracement values, it’s important to view how the market responds and see how the volume reacts. If we don’t see strong follow-through on a bounce from the 50%, there could be a strong bearish continuation in its future. Volume is your friend and confirms the trend. If you don’t see strong volume following an upward bounce, it’s entirely possible you could get stuck in a bull trap — and no one wants that.

Bull traps are designed to lure aggressive bulls into long positions prematurely to create liquidity for the bearish investors in the market. If you are unsure of what direction the market is moving, there is nothing wrong with sitting out.

Summary:

  1. A potential markdown phase is under way as bitcoin sees aggressive selling pressure.

  2. Today marks the first day of lower lows in weeks and marks a potential macro downtrend.

  3. Support will likely be found at the $10,000 values, which coincide with the 50% macro Fibonacci retracement values.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.



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Most of the World’s Biggest Cryptocurrencies Are Down Today

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The top 20 cryptocurrencies by market capitalization are all down today in excess of 10 percent, market data reveals.

According to CoinMarketCap.com, those cryptocurrencies have fallen by at least 13% – and in excess of 25% in the case of XRP – since the start of the day. At one point, within the 24-hour period, the overall market capitalization for all tokens had lost nearly $200 billion, falling from $710 billion to $536 billion at its lowest.

As of press time, that figure had bounced back somewhat, hovering around $573 billion.

marketcap1 16 728x270 Most of the Worlds Biggest Cryptocurrencies Are Down Today

The drop illustrates the turbulence in cryptocurrency markets today, with bitcoin, the world’s largest cryptocurrency by market cap, having fallen by 14 percent in 24 hours, bottoming out at $11,182 before recovering slightly.

Indeed, only several of the 100 cryptocurrencies listed on CoinMarketCap’s main page are reporting price gains, with assets like siacoin and Bitcoin Gold reporting losses in excess of 30% over the past 24 hours.

On the brighter side, today’s market correction is not as severe as the one that occurred late in December 2017, when the overall market value fell more than $200 billion. At the time, bitcoin had fallen to $10,800.

Further, today’s slump still leaves the market well up year on year. On Jan. 16, 2017 the combined value of all crypto tokens was under $16 billion. Today’s low is at roughly similar levels to those seen a month ago, when the market cap stood at around $554 billion, according to CoinMarketCap.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

Down graph image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.



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Ripple Price Drops to 2.5-Week Low, Eyes Sideways Trading

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Ripple’s XRP token fell to a 2.5-week low today, and is looking at a more or less sideways movement in the short-term, chart analysis suggests.

The world’s third-largest cryptocurrency by market capitalization fell to the low of $1.23 at 09:54 UTC today before regaining a little poise, data source CoinMarketCap indicates. Further, XRP is still down 23 percent over the last 24 hours. At press time, XRP is trading at $1.39.

As per OnChainFX, XRP is down 63.41 percent from the record high of $3.84 set Jan. 4.

A look at the charts suggests XRP may have found a bottom and could consolidate in the next 36–48 hours before possibly resuming the sell-off.

4-hour chart

ripple 4 hour 1 Ripple Price Drops to 2.5 Week Low, Eyes Sideways Trading

The above chart (prices as per Bitfinex) shows:

  • Dip demand/bearish exhaustion as indicated by the Doji candle (previous 4-hour candle marked with a circle).
  • A head-and-shoulders breakdown (bearish reversal pattern) indicating the rally from the December low of $0.19700 has ended. As per the measured height method, that has opened doors for a drop to $0.30 (though that looks far-fetched currently).
  • 50-day moving average (MA) has adopted a bearish bias (sloping downwards).
  • Bearish 50-day and 100- day MAs crossover is confirmed (short-term average cuts long-term average from above).
  • 200-day MA has shed bullish bias (flattened).

Clearly, the 4-hour chart is loaded with bearish price patterns that indicate scope for a drop to $0.8610 (78.6 percent Fibonacci retracement). However, the relative strength index (RSI) on the chart above shows oversold conditions.

Daily chart

ripple daily 1 Ripple Price Drops to 2.5 Week Low, Eyes Sideways Trading

As seen in the chart above, the 5-day and 10-day MAs have adopted bearish bias (sloping downwards). The RSI also favors further downside in XRP. The tide has clearly turned in favor of the bears.

However, the 50-day MA is curled up in favor of the bulls. This coupled with the oversold conditions on the 4-hour chart (as shown by the RSI) and the doji candle on the 4-hour chart could keep XRP rangebound in the next 36–48 hours.

The 50-day MA would shed its bullish bias (top out) following a bout of consolidation, thus opening doors for further losses.

View

  • XRP is likely to trade in the sideways manner in the range of $1.80 to $1.00 in the next day or two, before resuming the sell-off.
  • Overall, prices look set to $0.8610–$0.60 levels in the short-run.
  • Bullish scenario: A rebound from the 50-day MA, followed by a quick move above $2.25 (Jan. 11 high) would signal a bearish-to-bullish trend change.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

Ripples image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.



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New Cryptocurrency Exchanges Proliferate in South Korea Despite Regulation

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korean exchanges banner 1068x1068 New Cryptocurrency Exchanges Proliferate in South Korea Despite Regulation



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New cryptocurrency exchanges are rushing to launch in South Korea despite regulatory uncertainty due to high demand and lucrative business models. Ten crypto platforms are expected to open for business in the first half of this year, including two run by Kosdaq-listed companies.

Also read: South Korea Urges 23 Countries, EU, and IMF to Collaborate on Curbing Crypto Trading

New Exchanges Entering the Market

Despite regulatory uncertainty, new entrants are hurrying to launch cryptocurrency exchanges in South Korea. “An increasing number of information technology (IT) companies, such as gaming and security, have declared to enter the cryptocurrency exchange market,” Business Korea reported on Monday.

nexcoin 300x79 New Cryptocurrency Exchanges Proliferate in South Korea Despite RegulationTwo Kosdaq-listed companies, in particular, are “accelerating the establishment of [their crypto] exchanges,” the publication noted. Nex G and Hanbit Soft are currently building security and anti-money laundering (AML) systems in order to run cryptocurrency exchanges. Both expect to launch their exchanges in March, the news outlet conveyed and quoted a Nex G official saying:

We are planning to operate the exchange dubbed ‘Nex Coin’ and we already established the corporation last week. We will set up all the systems provided by a normal financial institution such as anti-money laundering and security control systems.

Huge Profits Drawing Exchanges

shutterstock 175496123 300x200 New Cryptocurrency Exchanges Proliferate in South Korea Despite Regulation“Under the current electronic commercial law, companies can operate a cryptocurrency exchange when they register it as telemarketing business to a local government,” Business Korea explained.

South Korea has four major cryptocurrency exchanges and many small and medium-sized ones. Bithumb has long been the country’s largest crypto exchange by volume. However, Kakao Corporation-backed Upbit claims to have overtaken its volume in December. Other major exchanges are Korbit and Coinone. The Digital Times noted early this month:

There are about 30 virtual currency exchanges currently operating in Korea, and there will be more than 10 additional [exchanges] opening in the first half of this year.

zeniex 300x96 New Cryptocurrency Exchanges Proliferate in South Korea Despite RegulationOn top of Nex Coin and Hanbit Soft, other exchanges opening in the first half of this year include Zeniex and Komid. The former said it will launch this month. The latter opened for business on January 5. Immediately the platform’s “homepage was paralyzed due to a surge in access,” according to Yonhap. “The web server had more than 100,000 people” trying to access the site, Komid explained.

komid 300x87 New Cryptocurrency Exchanges Proliferate in South Korea Despite RegulationThe news outlet pointed out that “huge virtual currency commission income” is the primary reason why many companies are opening up cryptocurrency exchanges. “In the case of Upbit and Bithumb, the largest exchanges in Korea, daily average commission income is estimated at 3.6 billion won and 2.6 billion won, respectively.”

What do you think of these new exchanges launching in South Korean? Let us know in the comments section below.


Images courtesy of Shutterstock, Nex Coin, Zeniex, and Komid.


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