Amidst Bitcoin's surge towards its all-time high, users of Coinbase's U.S. cryptocurrency exchange encountered a puzzling sight Wednesday: $0 account balances. As the cryptocurrency briefly surpassed the $60,000 mark before retracting, Coinbase scrambled to investigate the issue, assuring customers that their assets remained secure while acknowledging technical difficulties. CEO Brian Armstrong highlighted the unprecedented demand that exceeded the exchange's expectations, emphasizing the need for robust infrastructure to handle surges in trading activity.
Meanwhile, retail investors appear to be taking a backseat as Bitcoin continues to rally. According to crypto analytics firm IntoTheBlock, indicators of retail engagement, such as Google searches for Bitcoin and application downloads, have shown subdued activity. Despite Bitcoin's notable price movement, IntoTheBlock analysts suggest a quieter retail front, hinting at potential institutional influence driving this phase. As Bitcoin's price surges amid institutional interest, attention shifts towards U.S.-listed spot bitcoin exchange-traded funds (ETFs) as significant accumulators, indicating a nuanced shift in the cryptocurrency market landscape.
Coinbase Faces Technical Glitch Amid Bitcoin's Volatile Rally
In a tumultuous turn of events, customers of Coinbase's U.S. cryptocurrency exchange woke up to a concerning sight on Wednesday: $0 balances across their accounts. This development coincided with a colossal surge in the value of bitcoin (BTC), which swiftly reversed course shortly after reaching new heights.
Coinbase swiftly responded to the issue, assuring its user base that their assets remained secure while acknowledging the technical glitch. The exchange issued a statement on its website, stating, "We are aware that some users may see a zero balance across their Coinbase accounts and may experience errors in buying or selling. Our team is investigating this issue and will provide an update shortly. Your assets are safe."
Brian Armstrong, CEO of Coinbase, later shed light on the situation, revealing that the exchange had anticipated a surge in traffic but had been overwhelmed by the unprecedented demand witnessed on Wednesday. In a post on X, Armstrong stated, "It’s expensive to keep services over-provisioned, but we’ll need to keep working on auto-scaling solutions, and killing any remaining bottlenecks."
The outage occurred mere hours after bitcoin surged past the $60,000 mark for the first time since November 2021, flirting with the $64,000 threshold before experiencing a rapid downturn, settling back around $60,000. With bitcoin's all-time high of over $69,000 now within reach, the volatile nature of the cryptocurrency market is once again in the spotlight.
Interestingly, while Coinbase grappled with technical difficulties, other major cryptocurrency exchanges, such as Kraken, reported no such issues. This discrepancy highlights the challenges faced by exchanges in managing sudden surges in trading activity and the importance of robust infrastructure in ensuring uninterrupted service.
This isn't the first time Coinbase has encountered operational disruptions during periods of heightened market activity. In May 2020, the exchange experienced a brief outage following a 10% plunge in bitcoin's value within just 30 minutes. Similarly, in June 2019, Coinbase faced similar technical issues when the cryptocurrency market witnessed a sharp $1,800 drop in a mere 15 minutes.
These recurring incidents underscore the need for exchanges to continually enhance their technological capabilities to cope with the unpredictable nature of the cryptocurrency market. As digital assets continue to gain mainstream acceptance and attract increased investor interest, exchanges must prioritize scalability and reliability to maintain user trust and safeguard against disruptions during critical trading periods.
Bitcoin Surges Past $60,000 Amid Quiet Retail Activity, Institutional Interest Peaks
As Bitcoin (BTC) roared past the $60,000 mark, signaling a resurgent rally towards its all-time high, crypto analytics firm IntoTheBlock raised eyebrows with observations pointing towards subdued retail participation amidst institutional interest.
According to IntoTheBlock analysts, metrics indicative of retail engagement, such as web searches for Bitcoin on Google and application downloads, have shown tepid activity. Notably, the surge in downloads of the crypto exchange Coinbase's app to the number one spot in Apple's U.S. app store in late October 2021, coincided with the market peak for BTC and numerous other cryptocurrencies.
While transaction volume on the Bitcoin blockchain has seen an uptick, analysts noted that it pales in comparison to the levels witnessed during the peaks of the 2021 market frenzy. Similarly, the pace of new Bitcoin addresses being created has stabilized, cooling off from a spike observed late last year, likely attributable to the Ordinals frenzy.
The Ordinals protocol, enabling users to store non-fungible tokens (NFTs) on Bitcoin known as inscriptions, experienced a surge in popularity, causing network congestion and driving up transaction fees.
"Despite bitcoin's incredible price movement, current data indicates a quiet retail front," remarked IntoTheBlock analysts in an X post on Wednesday. "This suggests that institutional investors could be steering this phase. Eyes are on ETFs as potential accumulators."
Bitcoin's recent surge of nearly 50% within a month, surpassing the $60,000 milestone, has garnered attention. Concurrently, the CoinDesk20 Index (CD20) witnessed a 33% rise during the same timeframe.
The driving force behind this price surge predominantly stems from robust inflows into U.S.-listed spot bitcoin exchange-traded funds (ETFs). Since their debut in January, bitcoin ETFs have attracted over $6.7 billion in net inflows, with BlackRock's IBIT leading the charge, as per data compiled by BitMex Research.
The ascent of Bitcoin beyond $60,000 underscores renewed optimism in the cryptocurrency market, with institutional investors increasingly positioning themselves as key players in driving its trajectory. As the spotlight turns to ETFs as potential accumulators of BTC, the interplay between institutional and retail investors in shaping Bitcoin's future remains a focal point in the ongoing narrative of digital asset adoption and market evolution.
BTC Technical Overview
4-hour chart for BTC/USDT (Source: TradingView)
Bitcoin continues to exhibit bullish momentum as it maintains its upward trajectory, supported by positive technical indicators and strong buying volumes. Over the past 48 hours, the Bitcoin price has seen a series of higher closing prices on its 4-hour chart, indicating sustained bullish sentiment in the market.
Both the 9 Exponential Moving Average (EMA) and the 20 EMA are trending upwards, indicating a bullish trend in the short to medium term. The Moving Average Convergence Divergence (MACD) indicator confirms the bullish sentiment, with the MACD line consistently staying above the signal line. Meanwhile, the histogram also shows positive values, which may also be a sign of increasing bullish momentum.
The Relative Strength Index (RSI) remains in overbought territory, suggesting that the market may be overextended in the short term. However, high RSI values (above 70) do not necessarily imply an immediate reversal; rather, they indicate strong buying pressure. Nevertheless, traders and investors will want to keep an eye on this momentum oscillator on the 4–hour chart for any signs of a bearish reversal.
Considering the current market conditions, BTC is likely to encounter resistance levels around $62,590. In case of a breakout, the next significant resistance level to watch is around $64,000.00. On the downside, support levels are seen at $51,731 and $51,090. These levels may act as potential entry points for long positions or as stop-loss levels for short positions.
