binance ceo cz

Binance, by daily volume the world’s biggest crypto exchange, has stopped bitcoin (BTC-USD) withdrawals for what it initially described as a “temporary” period in a tweet by CEO Changpeng Zhao (CZ) earlier today.

“Temporary pause of $BTC withdrawals on #Binance due to a stuck transaction causing a backlog. Should be fixed in ~30 minutes. Will update,” CZ noted.

The news came at a particularly inopportune time for crypto markets, with leading crypto, including bitcoin crashing between 13% and 18% and a leading crypto lender, Celsius announced that is was stopping withdrawals from its platform for a while.

News on Friday that inflation in the US showed no signs of slowing led to another downward lurch in the equity markets, with tech stocks the worst hit.

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Cryptoassets are a highly volatile unregulated investment product.

After initially saying that the problem would be fixed in 30 minutes, CZ has added to a sense of alarm by following up with a tweet saying the problem could take “a bit longer to fix”.

Crypto exchanges starting to feel the strain?

His proviso that the pause on bitcoin withdrawals was “only impacting the Bitcoin network” may not have added to the sum of confidence in the market place at this time.

Older hands will remember that at times of heightened stress in the markets, exchange redundancy investment is often put under severe strain. Indeed, one of the reasons behind Binance’s growth in years has been its ability to trade through such problems seen elsewhere.

Any hint that Binance might be struggling with load balancing would add to market turmoil given its dominant position among crypto exchanges, but it is highly unlikely that the issues relate to solvency.

Binance at risk of DeFi contagion?

Nevertheless, with Binance much more involved with DeFi these days, the interconnections and lines of transmission from problem areas to itself are probably greater.

But for now Binance, is not saying anything about balance sheet issues or infrastructure problems, and no outages have so far been reported by its clients.

However, market participants will be puzzled by the exact nature of the problems as described by CZ. He says, “You can still withdraw Bitcoin on other networks like BEP-20.”

Having previously said there was a “stuck transaction” and with no issues reported by other exchanges regarding bitcoin, there is likely an issue with one of its hot wallets.

The latest news affecting Binance follows hot on the heals of the announcement by the U.S. Securities and Exchange Commission that is was investing Binance for having potentially been involved in the issuance of an unregistered security when its BNB coin held its initial coin offering in 2017.

Bitcoin flashing worst monthly RSI ever

The pile up of negative news flow may worsen as the crypto complex suffers from what could be its worst drawdown marking the end of a bull run.

Ethereum is now trading below the highs of the bull run that ended in early 2018 and bitcoin is getting closer to $17,500 seen in January 2018.

Bitcoin is trading on its worst monthly RSI ever AT 43.7. The January 2019 bottom was 43.9 and January 2015 44.6.

Last week we asked BeQuant research analyst Emiliano Bruno, who produced a report on bitcoin addresses in the money last week, if $10k bitcoin was possible – he said “extremely unlikely”. We are not so sure.

bitcoin monthly RSI

 

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