Bitcoin’s price dropped earlier on Friday after crypto exchange OKEx suspended withdrawals, but analysts told CoinDesk they don’t think significant further losses are likely.
- The top cryptocurrency by market value fell around 3% in the 30 minutes to 04:30 UTC, according to CoinDesk's Bitcoin Price Index.
- The move happened after OKEx announced an indefinite suspension of withdrawals due to one of its private key holders being out of contact with the exchange, reportedly because they are being held by police.
- While market sentiment may remain temporarily weak after the news, a price crash looks unlikely.
- "I don't think BTC will necessarily dive from here; the fund flow may look for venues that are based in countries with clearer regulatory stance and policy outlook," Denis Vinokourov, head of research at London-based prime brokerage Bequant, told CoinDesk.
- Vishal Shah, an options trader and founder of Polychain Capital-backed derivatives exchange Alpha5, suggested the news may place the OKEx trading venue in a bad light but have little affect on bitcoin's reputation.
- Bitcoin has shown resilience to bigger negative news over the past few weeks.
- The cryptocurrency quickly fell by $500 on Oct. 1 after U.S. regulators brought criminal charges against BitMEX, one of the biggest derivatives exchanges.
- The slide, however, was short-lived and prices broke into bullish territory above $11,200 over the next weekend.
- "In my opinion, prices will recover because the latest OKEx issue is not related to hacking or shutting down the exchange," Ki Young Ju, CEO of South Korean analytics firm CryptoQuant, told CoinDesk in a Telegram message.
- OKEx held 201,981 bitcoin in its wallets as of Thursday, according to Glassnode data.
- Similar action may unfold over the next few days, though bitcoin is vulnerable to any stock markets drops over coronavirus fears.
- At press time, bitcoin is changing hands near $11,324, representing a 1.6% decline on the day.