Bitcoin in danger of falling below critical $6,000 level on worries over exchanges
Cryptocurrencies have lost $350 billion in value year-to-date.
Bitcoin and major digital currencies were in free fall Friday with most coins shedding as much as 10%, wiping billions off the market cap of cryptocurrencies.
Bitcoin, the worlds biggest digital currency, is trading back at multimonth lows as ongoing exchange flaws continue to undermine the integrity of the market. The overnight news that Japan’s financial watchdog has hit six exchanges with orders to improve business follows two exchange hacks in the past eleven days, which saw $70 million of cryptocurrency seized.
“It’s critical that exchanges deploy top-notch security as it’s stricken confidence from the market,” said Naeem Aslam, chief market analyst at Think Markets. “It’s beyond ridiculous, and I think regulators should increase pressure on exchanges with regards to security.”
Aslam said that the hacks were doing severe damage to the reputation of both bitcoin and blockchain.
Technicals suggest a deeper correction
The Friday move sent bitcoin perilously close to the $6,000 support level and the Feb. 6 low of $5,947.40. Last week, Tim Enneking, founder and managing director of Crypto Asset Management, said some of his traders see bitcoin potentially trading below $3,000.
Bitcoin is on track to record its third consecutive losing week and sixth in the last seven.
Year-to-date numbers paint a bleak picture for owners of digital currencies. Bitcoin has shed 56%, ether ETHUSD, +3.08% is down 37%, Bitcoin Cash BCHUSD, +1.45% has lost 70%, Litecoin LTCUSD, +1.30% 63% and XRP XRPUSD, +0.72% the coin that runs on the Ripple protocol is the worst performer, losing 78% of its value.
The total value of all cryptocurrencies was last at $258 billion, the lowest level since April 10, according to CoinMarketCap.