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Bitcoin Price Plummets Below $6,400 Following MapleChange Exchange Alleged Hack

October 29, 2018 at 17:05 by Arathur Stephen

An increasing number of people are getting involved with cryptocurrencies in some ways. At the same time, hacking attempts have also increased over the years. A recent approximation revealed that digital currencies worth more than $750 million have been stolen in 2018 alone.

Back in January, hackers broke into Japan’s Coincheck cryptocurrency exchange. The devastating hack left investors bleeding off $530 million. After the crypto heist,  the Japan Financial Services Agency (FSA) became very crypto active ensuring that fresh attacks are kept at bay.

 In February 2014, Mt. Gox, the once biggest cryptocurrency exchange in the world, handling about 70% of all Bitcoin-related transactions at its peak, was closed following a hack attack. More than 850,000 bitcoins in total were stolen which were valued at over $450 million. When compared with the current exchange rates, the BTC stolen from the exchange would have been worth more than $5 billion today.

Canadian Crypto Exchange Shuts Down

The latest occurred over the weekend. A Canada-based cryptocurrency exchange, MapleChange has confirmed that it has suffered what appears to be a hack and all of its Bitcoins had been stolen. The Alberta-based exchange reported to its followers via its Twitter page, before it went offline, that it has suffered an attack. The hackers, they claimed, made away with all the funds that were in the custody of the exchange.

They further added, that they have closed down the site due to the attack and do not have any money to repay the stolen funds. The hackers explored a bug in the exchange that left the system vulnerable to the attack. However, investigations are underway into the matter as per the announcement made via their official Twitter page on Sunday.

Due to a bug, some people have managed to withdraw all the funds from our exchange. We are in the process of a thorough investigation for this. We are extremely sorry that it has come to end like this. Until the investigation is over, we cannot refund anything

Shortly after the announcement was made, MapleChange Twitter page, which has less than 2,000 followers, also subsequently shut down, leaving customers in the dark. The exchange has suspended all customers accounts to allow for investigations to run their course.  Meanwhile, the exchange has told the users via another Twitter message that they will not remunerate the victims until the investigation has been completely carried out.

We have not disappeared guys. We simply turned off our accounts temporarily to think this solution through. We cannot refund everyone all their funds, but we will be opening wallets to whatever we have left so people can (hopefully) withdraw their funds.

A Premeditated scam Or Are Upgraded Servers to Blame?

MapleChange had reported earlier in the day to its users that it had upgraded its servers and that their new Version 2.0 was now online and available for use. Within 18-hours of the announcement, news of the hack began to surface, dealing a massive blow to the exchange and its users.

However, a close investigation of the exchange revealed that this was the company’s exit strategy. First of all, if it was actually a real hack, MapleChange would not have deleted its social media accounts. Secondly, a closer look at the company’s domain registered at GoDaddy by one “Flavius P” indicates that the owners were likely fraudulent.

Although the exchange was not exactly a large one by any stretch, it is still very unusual for an exchange to close down purely on the reports of a scam or a successful hack attack. Security issues like these are the reason why large institutional investors fear to invest in digital assets.

Moreover, several media outlets had previously reported that 919 bitcoins, worth nearly $6 million were stolen from the exchange. Nevertheless, MapleChange has since responded stating that the hack only totalled around 8 bitcoins. The message sent via twitter reads:

In his turn, the prominent  CEO of Binance, Changpeng Zhao has advised consumers to stick to established crypto exchanges that have access to cold wallet storage.

BTCUSD Technical Forecast

The number one digital currency, Bitcoin had been trading in a tight range of $6,450-$6,500 in the past few days, before declining below the $6,400 mark on Monday. The leading digital currency may now record a loss for the year as its 10-year anniversary draws close.

Bitcoin price faced an intense selling pressure against the US dollar after consolidating in a tight range below the $6,480 resistance. The BTCUSD pair plummeted and broke the important range support at $6,360.

The 2-hour chart shows that the price failed on several occasions near the $6,480 and $6,500 resistance levels, which eventually paved the way for a downward slide. The price dropped and broke the 50% Fibonacci retracement level of the last wave from the $6,050 low to $6,753 high.

Moreover, the price broke the $6,360 support and settled below the 100 Simple Moving Average (SMA). Nevertheless, there was a break below a crucial bullish trend line on the chart with support at $6,395.

The price dropped sharply below the 61.8% Fibonacci retracement level of the last wave from the $6,050 low to $6,753 high. It has traded near the $6,250 support zone and is recovering currently.

If the price continues the downward trend, it may soon test the $6,250 support area. Below $6,250, the next important support is near the $6,143 zone and this can be regarded as the last line of defence. If the bears remain in control below the $6,360 level, traders should expect further declines in price in the coming days.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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