Altcoins’ Fate Dicey as Binance Ends One-Week Deposit/Withdrawal Suspension
The proposed move to lift a one-week suspension of deposits and withdrawals on the world’s top cryptocurrency exchange following its hack will trigger a general price action for altcoins which could go both ways. In its third update on ‘the security incident’ on Sunday May 12, Binance notes that it will “fully resume deposits and withdrawals on Tuesday (May 14)” at an exact time that will be communicated later.
The suspension came immediately the exchange discovered a large-scale security breach last Tuesday (May 7). However, despite the suspension, Binance continues to enable trading for traders who wish to adjust their positions.
Generally, many short-term traders including in the crypto space, depend on price action and the formations it creates to make their trading decisions. A price action is devoid of third-party indicators and any particular news except for, in the crypto market case, the strength Bitcoin has gained of late. The crawling surge in Bitcoin price over the past month caused several altcoins to fall in value over the time. As often times, altcoins depend on Bitcoin’s stability to move. Bitcoin’s continuous upward trend would force major altcoins to follow suit dragging some smaller assets along.
Otherwise, Bitcoin’s drop could see those with huge risk appetite to use their gains from its recent rise to cash in on the low-value altcoin market. If that happens, Bitcoin will dump slightly especially considering that it is being surmised that Binance’s hack contributed to its spike – shortened Bitcoin supply by 7000 while not allowing deposits (new money) to flow into altcoins.
Binance and altcoins
Binance has gained the acclamation for being the platform for users to buy hundreds of altcoins in huge volume and with tiny fees. It’s been seen as the entry for new money hence more altcoins and their traders depend on it to ensure a seamless market flow. This fact could be used to try to explain why its hack is not seen widely as out of the usual – although only a tiny fraction of assets was reportedly stolen from the exchange since they claim to have about 98% in cold storage.
The exchange is tightly linked to the altcoin market rejuvenation because it provides users across the board with the platform to altcoins. Though, following Bitcoin’s rise, the resumption may give some the reason to cash out, a lot of Binance users who have been trying to take advantage of the altcoin dips have not been able to do so for the deposit-and-withdrawal suspension. It is not clear how the market will react to the resumption. It could lead to swing trading or, as it is being projected, kick off the altcoin season.