The crypto market just got hit with a bit of news. Major crypto exchange OKEx has recently announced suspension from withdraws due to one of its private key holders being compromised. Will this news create a tumbling effect? Many analysts don’t think so. Let’s go over why.
Like many centralized exchanges, OKEx separates its cold storage private keys among its chief members. This provides protection from internal and external bad actors. OKEx has had one private key holder MIA. They believe the holder is under a public security bureau’s investigation and full cooperation is required. Without the holder, associated authorization could not be completed so the exchange decided to freeze withdraws to protect users and the exchange.
After the statement was made, the price of bitcoin dropped from $11,514 to $11,190 within a 30-minute span. This caused a small market wide-pullback. The good news is that price bounced off the support, which shows strong bullish fundamentals. Bulls struggle to sustain price above $11.5k, but as long as they stay within range, a rally could be on the way.
BTC/USD daily chart. Source: TradingView
Bears will try to drag the price down below $11.1k, but they’ll be faced with buyers due to the 20-day exponential moving average being $11,081. The upsloping 20-day EMA and the positive relative strength index suggests that buyers have the upper hand. If the bears manage to break support, the price can drop to $10k.
Just like BitMEX’s criminal charges, OKEx’s situation is contained at the institution’s level. This is due to the issues having no relation to hacking or shitting down of the exchange. The crypto market continues to become desensitized to negative news since we get them more often than not. It seems like bitcoin is set to bounce back from this news, though it’s still vulnerable to any stock market drops over virus fears.