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Mixin Network hack hits Bitcoin and XIN token

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Despite the conclusion of the summer season and the anticipated resumption in typical trading activity, digital asset market volumes remain low both on centralized exchanges and on-chain.

The economic policies enacted by central banks, particularly the Federal Reserve, have redirected capital towards less risky investments such as government bonds. These bonds currently offer an attractive risk/reward ratio, offering a passive income while mitigating portfolio risk.

Bitcoin’s price has seen a 1.79% decrease in the past seven days. Additionally, it experienced a 1.49% drop on Sunday. These price fluctuations began as trading commenced on Monday, September 25, after the cryptocurrency platform Mixin Network announced that a group of hackers had targeted its cloud service provider, resulting in a loss of nearly $200 million in a significant cyberattack.

Mixin Network stated that this incident forced it to temporarily suspend deposit and withdrawal operations.

The Mixin platform further explained that it would reopen the suspended services after identifying and rectifying security vulnerabilities. It added that transactions would remain unaffected during the evaluation period.

Mixin’s CEO, Feng Xiaodong, said the team will guide how users can recover their lost assets thereafter. It is worth noting that Mixin Network is a decentralized P2P exchange platform for cryptocurrency projects, supporting 48 currencies and holding assets valued at over $1 billion.

In response to this incident, Mixin’s XIN token saw a sharp decline early in Monday’s trading, losing approximately 10% and trading at $195. Bitcoin’s prices also dropped by around 1.49% in the past few hours, reaching a low of $26,055.

Furthermore, the NFT platform OpenSea warned its users of a potential security breach with one of its suppliers. Platform officials explained that the incident might not have immediate effects on users, but it could expose customer API keys.

OpenSea advised users to refresh their current keys and replace them immediately with newly generated options, confirming that the existing API keys would expire on October 2nd.

“I believe this news will have a significant negative impact on Bitcoin’s price, which often leads to the prices of other cryptocurrencies,” said Wael Hammad, Chief Commercial Officer at online broker XS.com. “Additionally, I see regulatory measures tightening against digital currency platforms and companies reaching their peak after these events, ultimately causing a sharp decline in Bitcoin prices, possibly reaching $20,000.”

Hammad said this downward pressure will also adversely affect other digital currency prices. “I do not foresee any significant market recovery until the end of the current year unless positive actions or clear regulations for traded Bitcoin funds and digital asset sector security are implemented to ensure investor confidence,” he said.


Upswing in ETH and BTC addresses

On a positive note, both ETH and BTC witnessed an upswing in the 7-day moving average of active addresses over the past week. ETH saw a notable increase from 372,000 to 508,000 active addresses, marking its highest average in 2023. Meanwhile, BTC surged from 906,000 to 1.11 million active addresses, reaching levels not seen since 2021.

Furthermore, Bitcoin’s hashrate continues its upward trajectory, achieving a new all-time high in the past week. Hashrate, a measure of a blockchain’s computational power that impacts network security and mining difficulty, has reached record levels multiple times in 2023, despite Bitcoin’s price significantly falling from its all-time high of $69,000 recorded in November 2021.

“The primary driver behind this hashrate growth is the enhanced efficiency of mining farms, attributable to improvements in mining hardware and the increased utilization of renewable energy sources for BTC mining,” said Matteo Greco, a research analyst at Fineqia International. “Recent estimates indicate that more than 50% of Bitcoin mining now originates from renewable sources, marking a significant milestone for the network’s sustainability.”

Turning to liquidity, the price slippage for $100,000 sell orders on centralized exchanges within the BTC/USD pair is diminishing. Price slippage, which represents the variance between an anticipated trade price and the executed trade price, is decreasing, indicating improved market liquidity.

Low liquidity levels and the challenges faced by market makers have been key issues in the digital asset market throughout 2023. Enhanced liquidity depth would play a pivotal role in promoting increased trading activities and revitalizing the market.

Bitcoin (BTC) concluded the past week with a closing price of approximately $26,250, representing a 1% decline from its previous week’s closing value of $26,500. Over the course of the week, BTC reached a peak price of nearly $27,500 before gradually losing momentum, eventually settling near the weekly low of $26,000 as the weekend ended.

Bitcoin dominance metric remains stable

The Bitcoin dominance metric, which gauges the relationship between Bitcoin’s market capitalization and the overall digital asset market capitalization, remained relatively stable, dipping to 49.9% compared to the 50% recorded seven days prior. This confirms minimal volatility and price fluctuations across the broader market during the past week.

Daily trading volumes on centralized exchanges, measured over a 7-day period, continued to exhibit limited activity. The cumulative trading volume over the last seven days amounted to approximately $10.5 billion, reflecting an 8.5% decrease compared to the preceding week, but still higher than the lowest levels reached in the initial week of September.

On-chain data also underscores the absence of substantial growth in activity, particularly when compared to the minimal levels observed at the outset of September.

Bitcoin’s on-chain trading volume, calculated over a 7-day span, totalled approximately $19.1 billion during the last week. These figures represent the lowest on-chain trading volume since March 2023.

Ethereum (ETH) similarly demonstrated limited on-chain activity. This observation is corroborated by examining ETH’s net emission, which turned positive in the last 30 days. Ethereum employs a burning mechanism tied to transaction fees, and a positive net issuance indicates that on-chain activity has not surged sufficiently to offset new token emissions resulting from staking rewards, leading to an overall increase in the token supply.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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