Bitcoin Still Closed Above $44,000 Despite the Japan Liquid Exchange Hack
Bitcoin’s price dipped by 2% at the end of the day following the hacking incident. However, it still closed above the $44,000 support level, selling for about $44,400 at the time of publishing this article.
Bitcoin reached a high of $45,986, signifying the force and confidence behind the bullish momentum. However, it still fell back below its 200-day moving average, reversing gains made on 13th August.
Jon de Wet, the chief investment officer at Zerocap, says, “We still have support at $44,000 and $42,000, which is the line in the sand for short-term momentum. A daily break below $42,000 would place some confidence in the bears, but on balance, we believe the price will hold above this level over the coming week.”
What is Fueling the Bullish Momentum?
Bitcoin’s price usually falls after a hacking incident. Consequently, its stability is a strong sign of the bullish confidence behind the cryptocurrency. Jon de Wet and other investment officers have credited this to several factors, including:
- Smart Money
Jon de Wet says that smart money dominates exchange flows. A shortage of bitcoin in the market signals that investors are holding, while an influx signifies that they have a good reason to sell. Smart money movements show that many investors are holding their bitcoin, fueling speculation that the bullish momentum will continue.
- Political Instability
Bitcoin has taken its place among financial security assets. To this end, people are buying bitcoin as a store of value to protect against inflation and other shockwaves impacting regular currencies.
More people have been buying bitcoin because of the COVID-19 pandemic. The pandemic has disrupted the global economy, causing inflation and other financial challenges. Additionally, the ongoing political instability in the U.S. and economic shakeup in China are inspiring the ongoing bullish momentum. The unfolding crisis in Afghanistan is also expected to increase the cryptocurrency’s demand, further boosting the bulls.
What the Future Holds
Bitcoin’s value has been fluctuating in the recent past, but investors predict that the bullish momentum will persist and yield more gains. The factors discussed above are still in play, and they are expected to sustain the ongoing demand for bitcoin. To this end, on-chain indicators show that the cryptocurrency will hold above the $44,000 level, indicating a continuation in the bullish trend.
It is also worth noting that Ethereum, another major cryptocurrency, also indicates smart money flow. ETH balances in cryptocurrency exchanges are at an all-time low, indicating investors’ intentions to hold. “Leverage is not excessive in this market right now – all very supportive of a buoyant week ahead, despite the macroeconomic landscape,” says Jon de Wet.
However, many of the smaller cryptocurrencies have been sending mixed signals over the past 24 hours. Some of the gainers include terra, cardano, and terra, while some of the losers include polygon, chainlink, and uniswap.