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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:

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

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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).

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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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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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Bitcoin

Trade Recommendation: Ride the Next Rally of Bitcoin

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The profit taking period that saw the Bitcoin market fall from 19,697 to a low of 13,501 in a matter of a few days is almost up. The market appears to have generated a new higher low and will use that level to make its next move up.

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Technical analysis reveals a large reversal pattern in the hourly chart that could signal the end of the correction. In addition, volume has been steadily decreasing. On Coinbase, volume spiked by as much as three times its average value in the hourly chart during the height of selling. In the last seven hours, however, volume has been way below its average indicating that bears have lot ammunition. More importantly, RSI in the hourly chart is far from overbought territory. This gives the market a lot of room to breach resistance at 18,000.

The strategy is to buy the market when it goes above 18,000. With signs of selling exhaustion, bears may not put up much of a fight the next time the pair breaches 18,000 on Coinbase. Also, the market has no stiff resistance above 18,000 so it has a clear path to our target of 22,500.

Hourly Bitcoin Chart on Coinbase

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As of the time of writing, Bitcoin is trading at 17,200.

Summary of Strategy

Buy: breach of 18,000

Support: 17,200, 16,800, and 16,450

Target: $22,500

Stop: Move below 16,450

 

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

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