Bitcoin Sinks after Colonial Pipeline Ransom

Analysts suggests the technical breakdown and the Colonial Pipeline Co.s ransom, the Bitcoin sank to a two-week low. The token has dived from a peak of almost $65,000 in mid-April, casting a dark cloud over the crypto-currency sector. The recent selloff was aggravated by billionaire Elon Musk’s public rebuke of the amount of energy used by the servers underpinning the token.

By unearthing the digital addresses that the hackers used to transfer the funds, the FBI was able to find the Bitcoin. Almost all the Bitcoin ransom paid to the perpetrators of the cyber attack on Colonial is recovered by the U.S. last month proving that law enforcement (even outside of nation border) is capable pursuing online criminals.

Bitcoin Sinks after Colonial Pipeline Ransom

To Bloomberg Intelligence’s Mike McGlone, Tuesday’s decline is “linked to fears of the Feds seizing people’s Bitcoins,” he said. At the same time, “we’ve been in a down-phase for a month now and this is part of it. It’s a continuation of the latest downtrend and this is the latest spark. I thought Bitcoin would be up today on the Colonial news so I’m befuddled.

 

If the coin continues to decline and $31,000 and $30,000 are taken out, it could retrace its entire breakout from $20,000 and fall back to that level,” according to Tallbacken CEO Michael Purves. “This type of ‘round trip’ would not be unusual for an asset (or a stock) which put in an exponential rally,” he wrote in a note, adding that something similar happened after its 2017 rally.

“The major price support stands at the $30K level, and a slide below this handle could run into stops and accelerate the sell-off in the short run,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

Oanda’s Halley also says that “A break below $30,000 could lead to “another capitulation.”

“You had this phenomenon where Bitcoin got extended, but nothing goes up in a straight line,” said Dan Russo, portfolio manager at Potomac Fund Management. “That’s something to be expected — you’ve seen throughout its short history these bouts of deep drawdowns. It just got extended to the upside and started to roll over.”

“The virtual currency — which has more than tripled over the past year — is now in a “cooling off period” that could last “a few months” longer,” said Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno Pte.

Also Read: Bitcoin and its Energy Usage

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