Today, Binance exchange and the Syscoin price anomaly have dominated the news. Actually, most news posts have reported it as a “Binance hack” even though the exchange itself was not compromised. It was an external attack involving APIs.
However, even with these news, the value of the entire crypto market is up in the day, and Bitcoin (BTC) has pumped to over $6700. Syscoin, the coin that was involved in this whole debacle is also in the green. This is quite interesting because a few weeks ago, such news would have sent the market tumbling. It would literally have been a red day, and Syscoin would be one of the biggest losers in the day.
The fact that the market has been in the green all day long can only lead to one conclusion, the bear market is over. In a bear market, bad news tend to have a huge effect on the market, while good news have no impact. That’s why in the last 6 months, there have been lots of good news, but they didn’t stop the market from dropping further. Ripple (XRP) is a good example of this analogy. In the last 6 months, ripple (XRP) has been announcing partnership after partnership with financial institutions all across the world. However, its price has been trending lower, falling from a high of over $3 in December to a low of $0.40. The fact that these good news have not changed the trajectory of ripple (XRP) is an indicator that the market has been stuck in a bear run.
The reason why good news don’t affect prices in a bear market is because investor interest is usually almost non-existent. In the last 6 months, investor interest in cryptocurrencies has hit rock bottom. Google searches for bitcoin and other cryptos have been low. Low interest means low volumes, and low volumes mean that good news can’t push up prices. On the flip side, the slightest bad news cause those already in the market to panic sell, in a bid to salvage whatever is left of their assets. In the case of crypto, we have seen many unsubstantiated news send the market falling like a rock in the past 6 months. That’s because the prevailing market psychology at that point is controlled by fear, and made worse by low volumes.
Now that this fear is waning, bullish sentiment is slowly creeping back into the market. Bitcoin has pushed up from a low of $5700 to over $6700, and has been in positive territory for 7 days in a row. This has brought in buyers into the market, and people are looking to take advantage of the low prices, and buy crypto. It is this notion of cheapness that makes investors ignore hacking news, such as today’s news regarding Syscoin and Binance. This will give investors more confidence to put money in this market, further strengthening the bull run. The second half of the year could turn out better, and erase all the losses incurred so far.