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Global Malware Campaign WannaCry is Affecting Bitcoin’s Price

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As CCN earlier reported, WannaCry has infected more than 36 000 computers. Users of affected machines are prompted with the following screen:

The malware WannaCry automatically encrypts files on the computer and demands the user to send $300 in bitcoin to a particular bitcoin address.

For the last weeks, we have seen a dramatic surge in cyptocurrency prices with bitcoin leading the way. The first thing I reacted to when I read other news articles about WannaCry was the press’ immediate “conclusion” that this is a targeted attack on multiple governments (even Russia is hit).

I do not believe that’s the case. I believe that the guys (and girls) behind this massive Windows-attack might be interested in one thing only, money (or rather bitcoins). I do not believe for one second that they have targeted specific companies nor countries. They have money on their mind.

Was the bitcoin price surge a part of the attack?

Then I started to wonder, what if these “hackers” are so sophisticated and powerful that they have been able to manipulate cryptocurrency prices? And then started the attack once they were satisfied with their gains? What you should consider is that bitcoin and ethereum are still small compared to other stocks and commodities; it’s much easier to manipulate cryptocurrencies than e.g. Gold.

I find it strange that the hackers have given users of the infected computers such a short timeframe to unlock the malware. There are two reasons I can think of:

  1. They want to create chaos and uncertainty for cryptocurrency holders
  2. They want to dump their coins fast

I cannot believe they want bitcoins sent to their addresses and expect “ordinary people” with no understanding of bitcoin to be able to buy and send them bitcoins within the respected timeframe. The attack seem to have started on May 12th (a Friday) and banks are closed during the weekend. It just doesn’t make any sense to me.

As you can see from the graph above, the Bitcoin price was negatively affected by the announcement of WannaCry. My guess is that there are some that have made a lot of money by shorting Bitcoin the last couple of days.

What will happen with the bitcoin price next?

I’m afraid that we have seen the highest high for bitcoin this year. I could be very wrong (and I hope I am), but something tells me these last couple of weeks have been “fishy”. There could be some very adverse effects for bitcoin and cryptocurrencies in general caused by the massive malware campaign WannaCry. Politicians and police authorities can put their combined effort into preventing malware attacks like WannaCry by implementing stronger regulations on cryptocurrencies (exchanges and withdrawals). In the worst cases, banks may be banned from accepting deposits or withdrawals from bitcoin exchanges. If they see that bitcoin can harm their economies, they will throw everything they got towards blocking and making bitcoin illegal.

Yes, I do know that cryptocurrencies will survive either way, but mass adoption might be much tougher to accomplish.

These are just my thoughts, I believe the following week(s) will give us a better idea what this major attack will do to cryptocurrencies in general.

If you got a lot of funds in bitcoin, ethereum or any other cryptocurrency, I would take my profits and wait with entering the market again until the dust settles. Be aware; I like to play it safe (and I could be wrong). At least secure some profits for now (ensure you won’t lose it all).

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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9 Comments

9 Comments

  1. knightofone

    May 13, 2017 at 6:31 pm

    This isn’t the first ransomware, i don’t see why it would affect the crypto space this much this time

    • Jonas Borchgrevink

      May 13, 2017 at 6:34 pm

      Hello, It’s probably the largest to date. But yeah, you might be right. It might not affect the price more than it already has..

  2. eko6321

    May 13, 2017 at 6:53 pm

    I think weekdays we will know more better results but your article make a sense.

  3. dano5050

    May 13, 2017 at 9:09 pm

    Trying to impute this or that price movement to this or that event is so contrived. If the price of bitcoin had gone up you would have said that all the folks having to rescue their computers had put upward pressure on prices.

    And then “I’m afraid that we have seen the highest high for bitcoin this year”. Really? Based on what analysis?

    Come on. We’re actually paying to read this. Try harder.

    • Jonas Borchgrevink

      May 13, 2017 at 10:26 pm

      As I explained, these are my thoughts. I’ve been into this game since 2013, I’ve seen ups and downs. Let’s see what happens the coming months. Would you buy me a beer if I’m correct? 🙂

  4. jacobcanfield

    May 14, 2017 at 1:15 am

    What do you think of all the server issues that Poloniex and Kraken are having? Do you have any recommendations for where to move my funds to? I have been following your blog very closely and saw the trend patterns for Stellar and Ripple as well and it seems like it’s consolidating and following the pattern, but the lows only seem to happen with website crashes. Does it matter if the sell offs occur from a website crash or natural course of action according to your technical charting? If so, could you do another analysis in the next few days?

    Thanks!

  5. Gabriel

    May 14, 2017 at 5:00 am

    Interesting take. My first reaction was to see it as a risk that people would associate bitcoin with illegal activities and be put off. But then, malware and ransomware have been around for a long time now, and the problem is not really the medium of payment but rather poor computer security across the board.

    • Jonas Borchgrevink

      May 14, 2017 at 11:35 am

      Yes, you might be right! Let’s see what happens the coming week.

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Bitcoin

Bitcoin Price Consolidates After Steep Loss as Market Cap Holds Below $100 Billion

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Bitcoin’s market capitalization remains firmly capped below $100 billion on Friday, as prices struggled to regain momentum following a catastrophic selloff earlier in the week. Although bitcoin remains firmly in the grip of the bears, price action over the last 24 hours suggests the worst of the downshift had passed.

BTC/USD Update

The bitcoin price is currently trading at $5,555.00 on Coinbase, having gained 2.6% over the previous 24 hours. The leading digital currency is still trading at a premium on Bitfinex, though the price spread has narrowed to around $120. BTC printed a low of $5,530.90 on Bitfinex but has since recovered near $5,674.

Aggregate pricing data provided by CoinMarketCap show a 24-hour return of 2.3% for BTC. Based on those metrics, the digital currency is averaging a price-per-coin of $5,616. That gives bitcoin a total market capitalization of $97.6 billion, down from $111 billion earlier in the week.

Bitcoin suffered a double-digit loss on Wednesday, with prices eventually piercing below $5,200 in the following session. That marked the lowest level in well over a year. At the same time, the broader cryptocurrency market plummeted to a low of around $176 billion as altcoins and tokens lost nearly $30 billion in value in less than two days.

At the time of writing, the combined crypto market cap had recovered to around $184.8 billion, though trade volumes had declined by roughly a quarter to $18.8 billion.

Virtual currency exchanges processed more than $6.3 billion worth of bitcoin trades in the last 24 hours. BitMEX, a leading derivatives platform, processed a whopping 29.3% of all bitcoin trades. No other exchange even came close in terms of daily turnover.

Recovery Likely

Bitcoin’s steep and sudden reversal followed a period of unprecedented calm for the virtual currency. As of Monday, bitcoin’s volatility index had fallen to the lowest level in over two years. The 30-day volatility index has since more than doubled to 2.15%, according to bitvol.info.

The sudden rush to liquidate BTC and other crypto holdings occurred on the eve of the bitcoin cash hard fork. The fork, which was initiated Thursday, has divided the bitcoin cash community into two camps with an ensuing tug of war over hash rate and user support. At the time of writing, the bitcoin ABC implementation was in the lead in terms of blocs mined.

Bitcoin’s massive decline, which has pushed prices deeply into oversold levels, is likely to be scooped up by bargain hunters in the coming days. The means a return to $6,000 – a level commonly associated with mining costs – shouldn’t be ruled out. If history is any indication, the market has a vested interest in keeping prices above that level.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 665 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

Crypto Update: Coins Consolidate After Key Breakdown

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The cryptocurrency segment is still under the influence of this week’s key technical breakdown that carried several majors below crucial support levels. Bitcoin’s moves have been dominating the market in recent days, and as the most valuable coin formed a short-term bottom, the top coins entered a choppy consolidation phase, retracing some of their steep losses.

Ripple and Stellar continue to outperform the broader market from a technical perspective, and some other coins, like Ethereum and Monero are also holding up above their previous bear market lows, but the overall picture is still overwhelmingly bearish in the market. The total value of the coins is slightly above the $180 billion mark, but further losses are likely in the coming weeks, with all of the majors being well below the breakdown levels, confirming the move.                

BTC/USDT, 4-Hour Chart Analysis

Bitcoin found support near the $5350 price level even though it spiked as low as $5200 during the rout, while the bounce carried the coin up to $5650. The breakdown is clearly intact in BTC and our trend model remains on sell signals an all time-frames, with a test of the $5000-$5100 zone still being likely in the coming period.

Bitcoin faces strong resistance in the long-term zone near $5850, with further key levels at $6000, $6275, and traders and investors shouldn’t open new positions here, with the long-term downtrend clearly being intact.

XRP/USDT, 4-Hour Chart Analysis

Ripple overtook Ethereum in terms of market capitalization again, thanks to its relative strength this week, and the coin is still clearly holding up above the long-term support zone between $0.42 and $0.46.

That said, our trend model is still on a short-term sell signal, and given the bearish segment-wide trends traders shouldn’t enter new positions here, even as the coin will likely be among the leaders of the future rally attempts. Further support levels are found near $0.375 and $0.355, while resistance is still ahead at $0.51, $0.54, and $0.57.

Ethereum Holding Its Ground above Bear Market Low

ETH/USD, 4-Hour Chart Analysis

While Ethereum failed to recapture the $180 resistance level during the bounce, it also avoided a sustained move below the previous bear market low near $170, despite the spikes towards the $160 support. Ethereum short-term stability is a slightly positive sign, but without further signs of strength, the coin remains in a clearly bearish technical setup. With that in mind, traders and investors should still stay away from the coin, as odds still favor the continuation of the broader downtrend.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade below the $44 support/resistance level after the clear break to new bar market lows, and it remains one of the weakest major from a technical perspective. A move towards the next major support zone near $38 is likely in the coming weeks, even if a bounce up to the $47 level is in the cards. Litecoin is on sell signals on both time-frames in our trend model as well, with further strong resistance levels ahead at $51 and $56.

EOS/USD, 4-Hour Chart Analysis

EOS is hovering around the key support zone near $4.50 since a spike towards the bear market low near $4.30 during the steep selloff. The weak bounce didn’t change the technical setup, and the coin is still likely to fall below the previous low, as the declining long-term trend is clearly intact. Our trend model is on sell short-, and long-term trend signals, with strong resistance levels ahead at $5 and $5.35.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 396 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin

Bitcoin Price Rebounds After Market Evacuation; XRP Kickstarts Decoupling Process?

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After two days in which $38 billion left the global crypto market cap, anyone who was in doubt over the fragility of the market at large has now been firmly answered.

Two competing theories have arisen over the source of the crash, with many suggesting the ongoing Bitcoin Cash hardfork saga as a possible culprit.

However, the more likely explanation appears to be the closing of Bitcoin future trades on the Chicago Board Options Exchange (CBOE). The same thing happened on the exact same date last year, right before the big bull run, and can be explained by traders selling off BTC just before the closure date (to be bought back later at a cheaper price).

Bitcoin Price Stabilizes…?

Bitcoin actually withstood the worst of the dip for the first few hours on Wednesday, and it originally  looked like we were witnessing an altcoin-only crash.

But eventually BTC got dragged into the mess and sunk 15% down to the $5,358 mark. Since then the price has stabilized at $5,500, and it has been there for six hours at time of writing. However, the previous level of $5,600 was also held for six hours before eventually continuing to plunge, so this may not turn out to be the last of it.

BTC volumes hit six-month highs during the sell-off, reaching $9 billion – a volume not seen since May. Surprisingly, if we exclude the BitMEX derivatives trading, then the highest concentration of BTC trades have come from the BTC/JPY (Japanese yen) pair. The $300 million worth of trades on the Liquid exchange represents 92% of all activity on that platform, and the dominance of Japanese money in BTC’s charts is a rare sight.

The Great Decoupling

Even those who aren’t fans of Ripple and XRP have been noticing the coin’s tendency to move independent of BTC for a while now. There’s an idea circulating that XRP is in the process of decoupling from Bitcoin, and its reaction in the wake of the market wide crash lends credence to the notion.

Following the crash, XRP shot up by 9.4%, as the coin price rose from $0.432724 up to $0.473791. That’s the biggest growth out of all the major altcoins, and it was also enough to send XRP to second place in the market cap rankings, as covered here earlier.

While most other major alts neared September-August lows during the recent dip, XRP is still way above that range, and is already pushing past the $0.45 price which we had gotten used to during October’s stasis.

Like Bitcoin, if we exclude the XRP transaction mining on the ZBG exchange, the most concentrated trade is the XRP/JPY pair on Bitbank.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 89 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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