Crypto Exchange Liquidity and Why It Matters, Explained

Crypto Exchange Liquidity and Why It Matters, Explained

Exchange liquidity is affecting every trade you make. From slippage to technical analysis accuracy, understanding a trade’s liquidity environment is key to a successful strategy.

What are risks and possible benefits associated with low liquidity?

We’ve discussed at length the benefits of higher liquidity and some of the risks of low liquidity, but it’s worth making those risks explicit, as well as mentioning some of the potential benefits of low liquidity for a trader.

Fundamentally, lower liquidity leads to less stable prices for an asset, meaning that slippage and price manipulation are risks in low liquidity environments, but also, dips in price can be turned into flash crashes. The lack of market participants can lead to long waiting times, which especially during a market swing can be detrimental to a trader.

On the other hand, that lack of stability can be a benefit for a trader. When a large order depresses the price due to low liquidity, an arbitrage opportunity opens up to purchase the asset at a discount.

In general, the most important thing is to understand exactly how liquidity is impacting your trading and to have a coherent strategy that takes these factors into account, deliberately choosing assets and exchanges with an appropriate liquidity environment.

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What is the liquidity landscape across exchanges?

There are over 190 crypto exchanges currently operating, with the top 100 seeing between $12.5 million and $3 billion in 24-hour volume according to CoinMarketCap. Put simply, exchange liquidity varies considerably.

According to CoinMarketCap’s liquidity measurement at the time of writing, the liquidity of the 50 exchanges tracked ranges between $1.9 million and $68.5 million. The top spot, at $68.5 million — over $12 million ahead of the next exchange — is held by HitBTC, which also boasts the largest number of trading pairs (836 compared to the runner-up, with 597) and a long history of no hacks since launch in 2013.

These metrics change regularly, however, meaning it’s a good idea to keep track of the shifting liquidity landscape through sites like CoinMarketCap.

How to measure liquidity?

There are a number of factors to look at when considering liquidity, but it’s useful to remember its practical context: the exchange on which it is traded. When trying to understand the liquidity of a specific asset, it can be helpful to look at numbers such as 24-hour trade volume on a site like CoinMarketCap, but this data is limited.

To measure liquidity in a practical way to help determine where and what to trade, you need to begin at the exchange level, as not all have equal trade volumes. When evaluating an exchange for liquidity, you can look at its 24-hour trading volume, its order book depth (the number of open buy and sell orders), and the bid-ask spread. When evaluating the order book, however, it’s important to remember that stop-limit orders, which execute when price is at or better than a target price, and iceberg orders, which are large orders broken in to small chunks to obscure the total value, are not always visible, meaning it might not be a fully accurate representation.

It’s also worth noting that CoinMarketCap recently released a new metric called “Exchange Liquidity,” which is aimed at reducing the influence of inflated volume metrics and calculated by a “range of key variables from the order book, such as the distance of the order from the mid-price, the size of the order and the relative liquidity of the asset in question.” This will likely prove a valuable metric for traders hoping to get an accurate representation of exchange liquidity.

Why is liquidity important?

The pure frequency of discussions concerning liquidity indicates its importance to financial markets, but what gives it that import? The definition itself (the ease with which one can exchange an asset for cash without affecting the price of that asset) is a great place to start.

Stability

The more liquid a market is, the more stable it is. When buying or selling Bitcoin, there are always plenty of traders on the other side willing to fill the order with minimal impact on the asset’s price. A less liquid, more obscure altcoin, however, is likely to have its price affected by a large trade. To execute a large trade, you’ll likely have to move through the order book, ultimately increasing the bid ask spread and raising or lowering the overall price of the asset. In this case, not only does the trader experience high slippage, but the asset itself is seen to be more volatile over time. A more liquid asset is more stable on an individual trade as well as on the market as a whole over time.

Manipulation resistant

They don’t call crypto the Wild West for nothing. With pseudonymous players from all around the world and little regulatory framework, crypto markets have a long history of price manipulation. But the lack of accountability is only half of the story; equally important is the liquidity environment that can make manipulation all too easy. An illiquid market can allow a single large actor or group of actors to manipulate the price for their benefit, while more liquid assets and exchanges are much more resistant to this kind of manipulation.

Transaction time

With higher liquidity and more traders, orders get filled much faster than low liquidity environments. While this is obviously convenient and a better user experience, it is also advantageous for higher frequency traders. Particularly in times of high volatility, being able to enter and exit a position quickly can make a serious impact on profits.

Technical analysis

Whatever your personal belief in the accuracy of technical analysis, it is a widespread strategy in the crypto markets. For those employing the technique, higher liquidity markets can help increase accuracy. With the tighter spreads and greater stability liquidity brings, price and charting formation is more developed and precise. In low liquidity environments, where large trades can significantly impact price, chart formation is more likely to be skewed by outliers than in healthier markets.

What does it mean for crypto trading?

Within the cryptocurrency market, we can think of liquidity across three levels: asset liquidity, exchange liquidity and market liquidity. Asset liquidity is a function of the buyers and sellers for a specific asset, as well as its ease of access on exchanges; exchange liquidity is a function of the makers and takers on the platform, as well as the asset pairs listed; and market liquidity is a function of all those pieces put together to constitute the health of the crypto markets.

Traders in these markets need to have all three levels in mind, but particularly asset liquidity and exchange liquidity, as each trade requires a decision based on, and direct interaction with, both of these. While most investors are considering fundamentals and technical analysis, there should also be a careful consideration of buy and sell strategies related to the liquidity of an asset and where to execute those transactions, particularly for frequent traders.

What is liquidity?

Liquidity generally refers to the ease with which an asset can be exchanged for cash without affecting the price of that asset. This definition has two aspects to it: ease (speed and effort required) and price (slippage, or the difference between the expected price and executed price, on a large order). When considering liquidity within the context of crypto exchanges, both components are critical — a trader needs to have transactions completed as quickly and cost effectively as possible.

Beyond liquidity for a specific asset, we also talk about market liquidity, which deals with the health of the overall market, such as a city’s real estate market or the crypto market. A liquid market is one in which assets can be easily bought and sold at stable, transparent prices.

Disgruntled Employee Stole Bitcoin from Japanese Project Vipstarcoin

Disgruntled Employee Stole Bitcoin from Japanese Project Vipstarcoin

One disgruntled employee and his accomplice stole hundreds of thousands of dollars from a Japanese project’s Bitcoin wallets because of disagreements with management.

Two men have been arrested in Tokyo on suspicion of defrauding IT firm Vipstar Inc. from hundreds of thousands of dollars in Bitcoin (BTC), Mainichi reported on Jan. 23. One of the suspects is a former employee who used his access to steal money from a trading fund.

Yuto Onitsuka and Takuma Sasaki are accused of stealing 78 million yen (approximately $712,000) from Vipstar, a blockchain project. They are also suspected of committing computer fraud and contravening a government act on the control of criminal proceeds.

The police alleges that on Oct. 29, 2018, the suspects made 12 unauthorized entries in a trading account that was managed by Vipstar, which is reported to have held the company’s working capital. They transferred the funds to their own account.

Both suspects confessed, with Onitsuka citing disagreements with the company’s management policy that compelled him to “try and ruin the company.” The second suspect, Sasaki, allegedly claimed to have acted on Onitsuka’s instructions. The two men reportedly did not meet in real life, having struck up a conversation over the internet in previous years. Onitsuka was the company’s CTO, and had access to customers’ accounts and login details.

The crime was discovered by Vipstar one month later, though it appears that the culprits were not immediately found. Meanwhile, one of the men had allegedly withdrawn 6 million yen ($54,000) to pay for his debts and a vacation.

What is Vipstar?

The project is a hybrid proof-of-stake and proof-of-work chain launched in early 2018. Utilizing anime motifs and claiming to “reintroduce fun,” the project’s primary aim is to facilitate cross-border donations. Its GitHub page shows that it’s an Ethereum (ETH) fork, though the actual code was forked from the HTMLCOIN repository.

Its token, VIPS, is currently ranked 616 on CoinMarketCap.

Has Quebec Missed the Ship for Attracting Cryptocurrency Miners?

Has Quebec Missed the Ship for Attracting Cryptocurrency Miners?

An uncertain regulatory climate has led cryptocurrency mining companies to seek opportunities elsewhere, rather than in Quebec.

The results of a 300 megawatt (MW) energy allocation for cryptocurrency miners, run by Canadian provincial utility provider Hydro-Québec, has failed to attract expected demand from the local industry.

A Request for Proposals (RFP) for power allocation was opened in June last year, supposedly based on huge demand of around 16,000MW from miners around the world that wanted to take advantage of Quebec’s hydroelectric power. Bid submissions closed on Oct. 31, 2019.

According to a Jan. 22 report from Radio Canada, the results of the RFP or only released recently with Hydro-Québec granting one-fifth of total block set aside for crypto mining. 

A long and winding road

As Cointelegraph has reported, Quebec’s path to eventual acceptance of cryptocurrency mining has been a rocky one. Initially, back in March 2018, local authorities said that they were “not interested” in attracting mining businesses to the province, unless they could provide some “added value.”

However, by May of that year, the Quebec government had supposedly lifted its moratorium on energy sales to cryptocurrency miners, eager to “avoid missing the ship.”

Just a week later, Hydro-Québec once again stopped processing requests for mining power after receiving an unprecedented demand, which reportedly threatened to disrupt its energy obligations for the rest of the province.

By the end of June 2018, Hydro-Québec had proposed new rules, under which blockchain companies must bid for power resources, and quantify the jobs and investment they intended to provide in the area, but local officials refused to ratify it. 

Instead, the provincial power regulator Régie de l’énergie ruled to reserve a 300MW block for crypto mining.

Jonathan Hamel, the founder and president of Acadamie Bitcoin — a crypto consulting service — told Cointelegraph that Hydro-Québec had dramatically overstated the purported power demand from miners:

“During the Quebec Energy Board hearings in June 2018, Hydro-Québec stated that they received more than 16,000MW equivalent of demand for Bitcoin mining to date. That number was completely debunked by invited Bitcoin miners and experts. Hydro-Québec finally admitted that the “serious” demand was somewhere around 1,000MW.”

Big players have already moved on

Blockstream has reportedly not bid for any of the available energy. CSO Samson Mow said last year that the company would maintain its existing facility in Quebec, but political uncertainty meant that it only had plans to expand in the United States.

GPU.one also decided to relocate its expansion plans elsewhere. The mayor of Baie-Comeau, a town in Northern Quebec, expressed his disappointment that this could not have been prevented: 

“I have been working for more than a year to be able to sell our energy to a promoter. HQ prefers to wait for the Americans. My promoter has already opened two other facilities in another province because he does not have the right to do so here.”

Indeed, Hamel added that there are simply better opportunities for miners in other locations, saying that, “there [are] now much more interesting offers outside of Quebec. It’s not uncommon to see power at around 0.02$ [Canadian dollars]KwH while the Quebec Large Industry Rate is twice that price.” He concluded:

“The numbers are clear: miners simply went elsewhere on the planet and Quebec lost hundreds of millions in potential energy revenue.”

Binance Invests in Taiwanese Blockchain Data Monetization Startup Numbers

Binance Invests in Taiwanese Blockchain Data Monetization Startup Numbers

Major cryptocurrency exchange Binance invested in blockchain data monetization startup Numbers.

Major cryptocurrency exchange Binance has invested an undisclosed sum in blockchain data monetization startup Numbers.

According to a post published on Binance’s official blog on Jan. 21, Numbers aims to create an open, transparent and traceable data sharing, verification and management system. The firm’s open source application reportedly allows individuals to own and monetize their personal data.

Since last year, Numbers has reportedly worked with nonprofit Shoah Foundation, the Stanford University and IBM to develop data traceability and verification systems to preload on the Exodus, the blockchain smartphone of tech giant HTC. Binance’s strategy officer Gin Chao said:

“Numbers app is integrated with Binance Chain through Zion, a hardware-based key management system and offers the developer community easy access to use the Binance Chain and for hardware wallet protection, digital signature and so on.”

The beginning of a broader collaboration

Numbers’ co-CEO Bofu Chen explained that he wants to help create traceable and trustworthy data through an open data framework. He believes that trading of such data brings more trust and higher operational efficiency to society. At the same time, the system also rewards individuals for their information. He explained that the startup’s relationship with Binance is not limited to the monetary investment:

“The investment from Binance will help us explore more use scenarios and accelerate technological and business development. We are also working to open the libraries we built for the developer community in 2020 so that more developers can leverage our work and use the Binance Chain with more ease.”

This is the latest in a long series of investments made by Binance. In late December, the exchange also invested in and became a strategic advisor at crypto derivatives exchange FTX.

In September last year, Binance participated in a $200 million funding round of Beijing-based Mars Finance, a local crypto and blockchain publication. Earlier that the same month, the exchange’s venture arm led a $5.7 million funding round to launch a new decentralized blockchain protocol, the FIO Protocol.

Pornhub Adds Tether Stablecoin as New Crypto Payment Option

Pornhub Adds Tether Stablecoin as New Crypto Payment Option

Adult entertainment website Pornhub has added a new crypto payment option after PayPal had abruptly stopped servicing its models in late 2019.

Adult entertainment website Pornhub has added a new cryptocurrency payment option after PayPal had abruptly stopped servicing its models in late 2019.

According to a Jan. 23 blog post, Pornhub now supports Tether (USDT) — a major United States dollar-pegged stablecoin — to allow instant and zero-fee payments via the crypto wallet and browser extension TronLink.

Pornhub supports Tron-based USDT

TronLink is a native wallet for Tron (TRX), the 12th largest cryptocurrency by market cap that is backed by the Tron Foundation. The USDT token became available on the Tron network after Tether and the Tron Foundation partnered and released the first Tron-based USDT tokens in April 2019.

In order to start sending and accepting payments in Tether, Pornhub models download the TronLink wallet app that is available both on Apple Store and Google Play, Pornhub noted. Alongside Tether, Pornhub is also now supporting a new payment processor known as Cosmo Payment.

Tron CEO Justin Sun subsequently commented about the news on Twitter, saying that the new crypto payment option is a good way to support “victims of centralized payment platforms like PayPal.”

PayPal halted its service for Pornhub due to alleged payment permission violations

The news comes after PayPal, one of the world’s biggest online payment processors, halted its payment support for Pornhub models in mid-November 2019. According to reports, PayPal stopped doing business with the site because Pornhub purportedly made some payments without its permission.

Following the news, the crypto community made a push for major cryptocurrency Bitcoin (BTC) as a new payment option on Pornhub. Meanwhile, Pornhub models were reported to have a lack of general knowledge of cryptocurrency, with some models noting that they did not know what crypto is.

Porn pushing crypto adoption?

Pornhub has been gradually working on promoting crypto use on its platform. In August 2019, the adult entertainment streaming website partnered with cryptocurrency payment and billing startup PumaPay to enable user payments in crypto.

Back in 2018, the adult entertainment website partnered with cryptocurrency Verge (XVG) to accept the coin as payment for Pornhub Premium and all Pornhub purchases. As reported by Cointelegraph, Verge’s price skyrocketed just after PayPal’s decision to pull the plug on Pornhub in November.

World Economic Forum Debuts Framework for Central Bank Digital Currency

World Economic Forum Debuts Framework for Central Bank Digital Currency

The World Economic Forum has released a toolkit for policymakers regarding the creation of central bank digital currencies.

The World Economic Forum (WEF) — together with some of the world’s major central banks — has created a central bank digital currency (CBDC) policymaker toolkit.

According to an announcement  on Jan. 22, the toolkit is the WEF’s attempt to help policy-makers understand whether deploying a CBDC would be advantageous and guide them through its design.

The WEF collaborated with regulators, central bank researchers, international organizations and experts from over 40 institutions to develop the framework. The head of blockchain and distributed ledger technology (DLT) at the World Economic Forum Sheila Warren explained:

“Given the critical roles central banks play in the global economy, any central bank digital currency implementation, including potentially with blockchain technology, will have a profound impact domestically and internationally. […] It is imperative that central banks proceed cautiously, with a rigorous analysis of the opportunities and challenges posed.”

Bank of Thailand Governor Veerathai Santiprabhob said that the institution made good progress on its own CBDC implementation, called Project Inthanon. Recently, reports started circulating that Hong Kong and Thailand’s central banks have stepped closer to implementing a joint CBDC for cross-border payments. He explained how the toolkit is useful for the continued development of the bank’s digital currency:

“From our experience, we need to identify tradeoffs between benefits from the use cases and their associated risks across different dimensions. This is where the Policymaker Toolkit could usefully provide an actionable framework for CBDC deployment.”

Central Bank of Bahrain Governor Rasheed M. Al Maraj announced that the institution that he is guiding will pilot the WEF’s toolkit, saying, “We hope that it will be an opportunity to learn, grow and to adapt to the changes in the Fourth Industrial Revolution.”

The pros and cons of a digital currency

The framework recognizes that a CBDC — among other things — can improve the cost and speed efficiencies of cross-border interbank payments, as well as reduce settlement and counterparty risks. The WEF notes that a digital currency can also enhance financial data transmission and reporting, and improve traceability compared to physical cash.

The paper admits that, before considering a CBDC, other solutions to economic friction should be considered. A digital currency may not add value in domestic interbank payments where an efficient system is already present.

The toolkit also notes that digital currency implementation requires substantial investments in cybersecurity and system resilience, and that potential risks come along with it:

“Generates substantial financial risks, including: 1) bank disintermediation risk, which could reduce bank profits and lending activity; 2) digital‐bank‐run risk as depositors may rapidly convert commercial bank deposits to CBDC.”

Toolkit distinguishes between different types of CBDCs

The WEF’s framework divides CBDCs into three categories: retail, wholesale and hybrid. The first category allows non-financial users to hold digital currency accounts, while the second is an electronic system granting access to the central bank reserve that could be used by commercial banks and other financial institutions for interbank and security transactions.

Hybrid CBDCs allow financial institutions that do not usually have access to a central bank deposit facility to hold reserves at it. This would enable stronger safeguards and monitoring of those organizations and improve interoperability between different payment systems, according to the WEF. 

The paper explains that in the case of a DLT-based CBDC, the central bank would preserve full control over the issuance of the digital currency:

“[The central bank] could delegate transaction approval to a more decentralized network, most likely consisting of regulated financial institutions. Transaction approval could follow a pre‐specified consensus process determined by the central bank, which could include privileges for the central bank such as transaction ‘veto’ powers or visibility. It is also possible to develop a DLT system in which the central bank remains the only validating node yet it benefits from other advantages related to DLT.”

The impact of stablecoins on CBDC development

Global efforts and discussions around CBDC development are increasingly common. Many believe that stablecoins — and Facebook’s Libra in particular — served as a wake-up call for central banks to realize that in the digital age the public expects cheap and instant digital payments.

Earlier this month, the president of the European Central Bank, Christine Lagarde, also said that she supports the bank’s active involvement in the development of a CBDC, particularly in addressing the demand for faster and cheaper cross-border payments.

Blockvest Saved from Default Judgement in Fraud Case

Blockvest Saved from Default Judgement in Fraud Case

Blockvest obtained a small victory in a case against an elderly couple accusing it of unlawful business conduct, but this may not matter in the long run.

Blockvest, which is currently embroiled in a dangerous lawsuit with the SEC, obtained a small victory in a similar case filed by an elderly couple. However, the Jan. 21 court filing suggests that this is based on a legal technicality.

The case against Blockvest was filed by Tommy and Christine Garrison, who alleged that the project violated securities law and regulations, and engaged in unlawful business conduct and financial elder abuse.

The couple had filed the case against Rosegold Investments and Master Investment Group, the companies behind the project. They also cited Reginald Buddy Ringgold, III, aka Rasool Abdul Rahim El, as a defendant.

Ringgold filed an answer for himself, while the companies failed to respond to the lawsuit and were put in default liability on Sep. 25, 2019, due to lack of opposition.

On Jan. 21 the court vacated the default judgement.

Ringgold still in trouble

Court filings revealed that the rationale for the retraction was the fact that all three entities were closely related. Ringgold is the founder and managing director of both companies, but he was not part of the default judgement. Blockvest may still be in trouble if it does not successfully defend itself.

This may be tricky, as the project has recently been accused by the Securities and Exchange Commission to have falsified key evidence. The commission motioned for a default judgement due to sanctions, which is yet to be granted. Both cases accuse Blockvest of violating securities regulation, meaning that a loss in one case would likely lead to the same in another.

Blockvest ran a $2.5 million pre-initial coin offering before being restricted by the SEC. While the court initially took its side, the decision was later reconsidered.

Ether Price Drop Slashed Valuation of Crypto Valley’s Top 50 Firms by 40%

Ether Price Drop Slashed Valuation of Crypto Valley’s Top 50 Firms by 40%

A new report from CV VC notes the effect of Ether prices on the valuation of top cryptocurrency and blockchain firms in Crypto Valley.

The combined valuation of the top 50 blockchain-related firms in the Swiss canton of Zug — known as “Crypto Valley” within the industry — fell by nearly half in 2019.

Swiss investment firm CV VC debuted a new report at the World Economic Forum in Davos, Switzerland on Jan. 22, giving an appraisal of the blockchain and cryptocurrency industries in the Crypto Valley during the last year.

Per the report, the valuation and subsequent price drop in Ether (ETH), the native cryptocurrency of the Ethereum network, led to a 40% drop in valuation of the top 50 firms — from $42.6 billion in H1 2019 to $25.3 billion in H2 2019.

One-year Ether price chart

One-year Ether price chart. Source: Coin360

But Ether price isn’t everything

CV VC director Ralf Kubli told a Cointelegraph correspondent at the World Economic Forum that, while all crypto related firms are ultimately influenced by token prices, it is important to examine funding inflows and employment:

“Overall funding has increased, so the real money that flows into the projects that we count in the top 50 has increased, so that’s basically a really important indicator for us that it continues to grow. And since […] employment has increased among the top 50 — employment has increased overall in the space in Switzerland — so that’s kind of how we gauge…” 

Indeed, the report notes that funding to the top 50 projects increased from $3.8 billion in H1 2019 to $4 billion in H2 2019. The top selected projects also employ 733 of over 4,400 crypto and blockchain professionals currently working in Switzerland and Liechtenstein. 

CV VC co-founder Marco Bumbacher and PwC Strategy Partner Daniel Diemers present the report in Davos

CV VC co-founder Marco Bumbacher and PwC Strategy Partner Daniel Diemers present the report in Davos.

Last year saw new additions to the top 50

As Kubli further noted, the top 50 companies change every year depending on their annual performance. 2019, for its part, saw the addition of several noteworthy projects to the list, including Libra — the global stablecoin project first proposed by Facebook — cryptocurrency exchange Bittrex Global and Ethereum development firm CasperLabs. The report also noted several unicorns — startups valued at over $1 billion —  including Bitmain, PolkaDot and DFinity 

Overall, the report states that indicators are pointing to a maturation of cryptocurrency and blockchain industries, with 842 related firms now operating in Switzerland.

Peter Schiff Bungled Wallet Password, Solving ‘Bitcoin Mystery’

Peter Schiff Bungled Wallet Password, Solving ‘Bitcoin Mystery’

Famous crypto skeptic and gold bug Peter Schiff said that he realized that he lost his Bitcoin because he mistook the pin of his wallet for the password.

Famous crypto skeptic and gold bug Peter Schiff said that his “Bitcoin mystery” is solved after realizing that he mistook the pin of his Bitcoin (BTC) wallet for the password.

In a tweet on Jan. 22, Schiff explained that he knows the pin of his wallet, but after the app was updated, he was logged out and he could not access his funds anymore. He also admitted that he never wrote down his seed phrase:

“My #Bitcoin mystery is solved. I mistook my pin for my password. When Blockchain updated their app I got logged out. I [tried] logging back in using my pin, which was the only ‘password’ I had ever known or used. I also never had a copy of my seed phrase. Honest but costly mistake!”

Many in the crypto community have criticized Schiff for making what they perceived as a rookie mistake. When Schiff initially announced that he lost the funds, Binance CEO Changpeng Zhao said, “I can’t believe I am about to say this, but maybe “stay in fiat”?

One Twitter user stated today that Schiff “should be the last person educating/warning people about Bitcoin. [He hasn’t] taken the time to learn even the most basic things about it!” Schiff, for his part, has defended himself, explaining:

“The most basic thing about Bitcoin is that it’s not money. It will not succeed as either a medium of exchange or a store of value. What the episode does show is how easy it is to lose your Bitcoin if you are confused about how wallets work.”

Schiff announced that he lost his Bitcoin on Jan. 19, at first convinced that his wallet was corrupted and that this was the reason why he lost access to his funds, stating, “I knew owning Bitcoin was a bad idea, I just never realized it was this bad!”

User-friendliness is important for adoption

The incident has attracted the cryptocurrency community’s attention to how the lack of user-friendliness in the ecosystem can result in lost keys and consequently, lost funds.

Zhao suggested his solution, saying that for most, keeping crypto assets on an exchange is safer than keeping the keys themselves.

Ethereum co-founder Vitalik Buterin also commented on the issue, saying that developers “can and should create better wallet tech to make security easier.” He then suggested turning to social recovery as a solution to the problem.

As Cointelegraph recently explained in an in-depth article dedicated to crypto asset recovery methods, the concept behind social recovery is to grant friends, family or even companies the right to restore access to a certain account.

Bitcoin Price Slides to $8.5K as 200MA Resistance Keeps Bulls in Check

Bitcoin Price Slides to $8.5K as 200MA Resistance Keeps Bulls in Check

A third stint below $8,500 hit markets on Thursday as progress towards $9,000 appeared unlikely once again.

Bitcoin (BTC) dipped below $8,500 on Jan. 23 as traders’ expectations of a slow downtrend from recent highs appeared to slowly come true.

Cryptocurrency market daily overview

Cryptocurrency market daily overview. Source: Coin360

BTC returns to $8,400s

Data from Coin360 and Cointelegraph Markets showed BTC/USD reach lows of $8,480 overnight on Wednesday. At press time, Bitcoin hovered at around $8,505.

The former level matches two other brief lows seen this week, and represents the bottom of a range the pair has traded in since Jan. 14. 

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

Over that period, traders saw highs of more than $9,150, while warning there was little chance of Bitcoin climbing higher still.

The reason, according to Cointelegraph contributor filbfilb among others, was resistance sparked by the Bitcoin price’s 200-day moving average.

At present, he said on Wednesday, he would favor less volatile price action in the short term, this nonetheless being to the upside, allowing BTC/USD to regain a higher position in its local range.

“I’m not saying the next thing that happens is we burst out of here… more expecting some sideways drifting to the upside to be honest but let’s see,” he summarized to subscribers of his Telegram trading channel.

As Cointelegraph reported, even the $8,500 zone is far from bearish according to some price performance measures.

In particular, the Stock-to-Flow model, historically uncannily accurate at charting Bitcoin’s journey to current levels, states that the mid-$8,000 area is exactly where the cryptocurrency should be at this point in time. 

Bitcoin SV forms losing altcoin bet

Among altcoins, it was once again Bitcoin SV (BSV) and Dash (DASH), which led the losses for investors. 

With 24-hour retracements of 11.1% and 6,1% respectively, the two tokens continued to erode previous gains from earlier in January. 

Ether (ETH), the largest altcoin by market cap, meanwhile shed 3.3% to trade at $164.

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

The overall cryptocurrency market cap was $235.4 billion, with Bitcoin’s share at 66%.

Keep track of top crypto markets in real time here