Bitcoin – Why Did MapleChange Spook Bitcoin Investors?

Bitcoin eyes $6,400 early in a bid to move back to its pre-Monday sell-off ranges, which would ease some of the negative bias hitting the broader market.
Bob Mason
Bitcoin BTC

Bitcoin fell by 2.2% on Monday, adding to the 1.52% loss of last week, to end the day at $6,347.1.

A range bound start to the day saw Bitcoin move to an early morning intraday high $6,512 to come within range of the first major resistance level at $6,519.07 before easing back to what was looking set to be another move within tight ranges as Bitcoin struggled to hold onto $6,500 levels.

News of a crypto theft from Canadian crypto exchange MapleChain hit the wires in the early hours but had somewhat of a delayed market reaction, with Bitcoin holding onto $6,500 levels despite the news having already been released.

Some uncertainty over whether the theft was as a result of a hack or exit scam lingered in the early hours before a broad based cryptomarket sell-off, as the reality hit home that such thefts could ultimately materially reduce the chances of a Bitcoin ETF hitting the market before the end of the year.

Having seen the crypto total market cap hover at around $210bn for a number of days, Monday’s sell-off saw the market cap slide by $6bn to $203.9bn, with Bitcoin’s dominance unsurprisingly rising back to 54% having hovered at around 53.6% in recent days. Heavier losses were seen across the other majors on the news, Bitcoin’s modest loss coming in spite of Bitcoin being most at risk of being affected by the latest theft.

There have been no comments from the SEC on the latest theft, which would certainly have given them an opportunity to reiterate the need for appropriate custodial services, etc., for the market to prevent such events from taking place.

For the Bitcoin bulls, the only good news would have been that this particular theft occurred across the border, with the losses on the day likely to have been far more significant had a U.S crypto exchange have been victim to the theft.

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At the time of writing, Bitcoin was up 0.25% to $6,362.5, with Bitcoin recovering from an early morning low $6,341.4 to a morning high $6,374.6 before easing back, the day’s major support and resistance levels left untested as the bears look to take a tighter grip following Monday’s news driven loss.

For the day ahead, Bitcoin would need to move through the morning high $6,374.6 to $6,393.3 to bring the $6,400 levels and the first major resistance level at $6,465.8 into play, though it may take a while for investors to brush off Monday’s sell-off that was material relative to Bitcoin’s recent ranges, but would have been considered a normal intraday move in the more volatile days, when $1,000 swings were common.

Putting the price action into perspective, the market response was relatively muted to the news, while not taking away the significance and effects of such events on the broader market and on the views of regulators who continue to look at ways to restrict a mass market expansion.

Failure for Bitcoin to move through the morning high later in the day could see Bitcoin move back into the red, with a pullback through the morning low $6,341.4 bringing $6,200 levels and the day’s first major support level at $6,274.6 into play. While the bears may be looking to take control, the news wires will need to play a hand in a pullback to $6,200 levels, which would certainly get crypto investors edgy and possibly return some much needed vol to the cryptomarket.

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