Bitcoin’s Price Recovery Stalls as BitMEX Shuts Down U.S. Accounts

Bitcoin’s rally stalled on Tuesday after Hong Kong futures exchange BitMEX announced it was closing U.S. accounts amid growing regulatory scrutiny. As Hacked reported since November, BitMEX has emerged as the biggest virtual market for BTC trades based on percentage of daily trade volumes.

BTC/USD Update

The bitcoin price notched a session high of $3,572.87 on Tuesday, according to CCN’s data feed. It was last seen hovering just below $3,700, having gained 2.8% over the past 24 hours. However, it should be noted that bitcoin rose sharply in the late morning of Monday’s session, so the 24-hour price tracker is a bit skewed.

Bitcoin’s sudden rally on Monday was significant for technical traders eyeing the $3,550-$3,500 support level. A breach below this level would have devastating consequences and likely lead to a re-test of the December low near $3,100.

Bitcoin’s short-term momentum indicators have improved since Monday’s rally attempt. The following chart, which is based on Bitstamp price data, highlight the momentum shift based on the RSI and MACD.

Trading in BTC reached $5.7 billion on virtual exchanges, according to CoinMarketCap. Volumes have increased sharply this year as long-dormant bitcoin accounts become active again. Dormant accounts began moving their coins in October, leading to a sharp rise in bitcoin’s circulating supply. More on this story: Bitcoin Likely Headed Lower as Whales Activate Long-Dormant Accounts.

BitMEX Closes U.S. Accounts

One of the world’s fastest growing cryptocurrency exchanges has pulled the plug on its North American market, citing increased regulatory scrutiny in the United States and the Canadian province of Quebec.

The decision, which was reported by CCN and the South China Morning Post, came in direct response to regulatory crackdowns targeting unlicensed cryptocurrency exchanges. In addition to ceasing operations in the U.S. and Quebec, BitMEX has advised clients in North Korea, Iran, Syria, Cuba, Sudan and Sevastopol (Crimea) against holding positions or trading on the platform.

BitMEX rose to prominence in the latter half of 2018 as traders began shorting bitcoin in record amounts. During the depths of the bear market in November and December, as much as one-third of bitcoin’s virtual exchange volume was processed on BitMEX. Spot markets accounted for the rest.

Last month, BitMEX CEO Arthur Hayes told the Unchained podcast that 24/7 markets represent the wave of the future and that other financial instruments will soon follow cryptocurrencies in around-the-clock trading. His firm processed nearly $1 trillion in trading volume over the past year.

More: Cryptocurrencies Still Recovering Strong After Monday Rally; BitMEX Sees 24/7 Trading as the Future

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi

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