Bitcoin holds above $23K despite crypto hacks – analyst explains why
Bitcoin (BTC/USD) continues to hold above the $23,000 price level despite recent hacks that have seen malicious actors drain millions of dollars from two crypto platforms.
BTC price, which recorded its best monthly performance since October 2021 with over 17% in 30-day returns and hit its highest price level since mid-June, is poised around $23,300 as at the time of writing.
Crypto analyst on BTC strength despite hacks
The outlook suggests bulls are strengthening above a key level that has previously provided the base for fresh momentum. Even then, the resilience comes amid a new wave of crypto hacks.
This week alone has seen two major heists – an attack on crypto swap platform Nomad bridge on Monday saw hackers steal nearly $200 million in user funds, and on Tuesday, Solana (SOL) was exploited to leave over 7,000 wallets compromised. More than $5 million had been stolen by Wednesday.
But according to Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, Bitcoin continues to suggest strength above $23k despite the exploits. He explained why this could be the case, noting:
“Despite these hacks, the illicit activity relative to fiat currencies remains low,” a scenario the analyst says is supported by South African professor Steven Sidley’s recent remarks that illicit transactions involving fiat currencies were 50x that experienced in crypto.
BTC above key level
Sotiriou also notes that Bitcoin is trading above the critical level presented by the 200-week moving average. A look at the charts show that the level is currently around $22,900, and bulls’ ability to hold above it could prove important to a new leg up, the analyst noted.
The chart below shared by Documenting Bitcoin via Twitter shows Bitcoin price return to the 200-week MA.
— Documenting Bitcoin 📄 (@DocumentingBTC) August 3, 2022
In a note to clients published on Wednesday, Sotiriou adds that Bitcoin’s show of strength above the 200-Week MA also comes as data indicates short Bitcoin funds recorded higher outflows this past week – the first such outflows for the inverse BTC product in the US over the past five weeks.
Also importantly, inflows into Bitcoin funds jumped in July to $474 million, up from outflows of $481 the previuos month.
“This is the biggest monthly inflow of 2022. As these funds are typically purchased by institutions and high net worth individuals, this is a signal that smart money is very interested in buying crypto at these prices,” Sotiriou said in emailed comments.
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