Balancer Falls Victim To Hack After Warning Of Critical Vulnerability: Funds Lost

In a disheartening turn of events, the decentralized finance (DeFi) protocol Balancer (BAL) confirmed a hack just days after warning about a critical vulnerability impacting multiple Pools. The attack, which took place on August 27, resulted in a loss of nearly $1 million for Balancer.

Previously, on August 22, NewsBTC reported that Balancer had discovered a critical vulnerability affecting its protocol. However, despite efforts to mitigate the risks and caution users, Balancer could not pause the affected pools. In response, the protocol urged users to withdraw from the impacted liquidity pools to prevent further exploits.

Balancer Exploit Unveiled

On Sunday, Balancer took to X (formerly known as Twitter) to acknowledge the existence of an exploit related to the previously disclosed vulnerability. While mitigation measures were implemented to reduce risks, they were insufficient to halt the affected pools. 

Consequently, users were advised to withdraw their funds from the vulnerable liquidity pools to safeguard their investments.

Meir Dolev, a Web3 security expert, shed light on the situation, revealing that the attacker was persistently carrying out their operation. Approximately $900,000 was affected, with over $600,000 already transferred to the address 0xB23711b9D92C0f1c7b211c4E2DC69791c2df38c1. 

Balancer

On the same note, Blockchain security firm Beosin further divulged that the hack was executed through multiple flash loan attacks. Flash loans, a feature enabling users to borrow funds without collateral, have been increasingly utilized as tools for exploitation in the DeFi space. 

The Balancer exploit underscores the ongoing challenges DeFi platforms face in ensuring user funds’ safety. As the industry continues to innovate and attract significant capital, securing protocols and addressing vulnerabilities must remain a top priority. 

BAL Price Plunges, Exploit Triggers 20.81% Decline 

In the aftermath of the recent exploit that targeted Balancer, the project’s native token, BAL, has experienced significant market repercussions. 

The exploit, which resulted in a loss of approximately $1 million, has had a noticeable impact on BAL’s price and various key metrics, reflecting the challenges faced by the platform, according to Token Terminal data

As a consequence, BAL’s price has witnessed considerable volatility. Over the past 30 days, the token has experienced a sharp decline of 20.81%, as seen in the chart below. 

Balancer

This downward trend is further highlighted by the token’s performance over a longer period of 180 days, during which it has plummeted by 51.69%, underscoring the impact of the exploit on investor sentiment and market confidence in BAL.

Furthermore, BAL’s all-time high (ATH) stands at $74.45, serving as a reminder of the token’s previous price peak. However, the all-time low (ATL) of $3.36 reveals the extent of the token’s decline following the exploit.

The exploit’s aftermath has also affected Balancer’s market capitalization metrics. The circulating market cap, representing the value of BAL tokens in circulation, currently stands at $150.06 million. However, this metric has suffered a notable decline of 22.60%, indicating a decrease in token valuation and investor confidence.

Another critical metric the exploit impacts is Balancer’s total value locked (TVL). TVL represents the amount of capital locked within the protocol. 

In the aftermath of the exploit, Balancer’s TVL has declined by 33.86%, signaling a shift in investor sentiment and potential reallocation of funds to more secure platforms.

Featured image from iStock, chart from TradingView.com

Bitcoin Bull Run Incoming? This Metric Could Suggest So

On-chain data shows a Bitcoin metric is forming a pattern that may hint that a bull run could be coming next for the asset.

Bitcoin HODLer Growth Rate Has Seemingly Reached The “Plateau” Stage

In a new post on X, the analyst Charles Edwards shared a chart highlighting a pattern that the BTC “HODLer Growth Rate” indicator may be forming.

This indicator keeps track of the 1-year growth in the holdings of the Bitcoin investors who have been keeping their coins dormant (unmoved) in their wallets since at least two years ago.

Generally, an investor who holds onto their coins for at least six months is termed a “long-term holder” (LTH). The LTHs are market participants with a high resolve who don’t usually sell quickly, regardless of whatever happens in the rest of the market.

Statistically speaking, the longer an investor keeps their coins still, the less likely they become to sell at any point. Thus, the holders who make it to the 2-year mark, which is the segment of interest in the current discussion, would then be the most persistent investors, even among these LTHs.

Therefore, whatever these holders are doing can be worth keeping an eye on, as it may have ramifications for the rest of the market. Naturally, these holders aren’t too likely to exert influence in the short term (as they usually remain silent), but in the long term when the effects of their behavior could emerge.

Here is a chart that shows the trend in the Bitcoin HODLer Growth Rate for this particular segment of the LTHs over the past decade:

Bitcoin HODLer Growth Rate

As Charles has marked in the above graph, there appears to be a specific pattern that the Bitcoin HODLer Growth Rate has followed throughout the cycles.

It would seem that during bear markets, the indicator’s value remains positive and in an uptrend, suggesting that these investors expand their holdings in such periods, and as prices dip further, they only up the pace of this accumulation.

As the bear market approaches its end and a transition towards a bull market takes place, the metric’s value goes flat, implying that these investors still accumulate, although at a constant rate, rather than an accelerating one. Then, as the bull run starts, these Bitcoin HODLers slowly stop the accumulation entirely and begin to participate in distribution instead.

The analyst notes that the Bitcoin HODLer Growth Rate now appears to have finished up the rapid bear market expansion phase and is now starting to plateau sideways.

Naturally, if the pattern of the previous cycles is anything to go by, it can mean that the Bitcoin market is now in the middle of the transition towards the next bull run.

BTC Price

Bitcoin remains stuck in a range as its price still trades around the $26,100 level.

Bitcoin Price Chart

Binance Will Halt These 39 Liquidity Mining Pools This Week

On Sunday, Binance announced that it will halt 39 liquidity mining pools this week following the latest assessment. As a result of a supposed failure to pass this assessment, these 39 liquidity pools are expected to stop operating on September 1, 2023.

Liquidity Pools Stopped By Binance

This decision was made due to the platform’s recent liquidity mining performance. The announcement said Binance Liquid Swap will “periodically review listed liquidity pools to concentrate liquidity for our users and ensure optimized trading experience, price and slippage.”

As a result of the most recent review, the 39 liquidity pools listed below are expected to cease operation on Friday: 

ADA/BNB, ALICE/BTC, APE/BTC, AVA/USDT, AVAX/BNB, BTC/TUSD, CHZ /BNB, CHZ/BTC, CTSI/BNB, DOT/BUSD, ENJ/USDT, FIL/BNB, FRONT/BUSD, GALA/BNB, ICP/BNB, ID /BTC, KDA/USDT, LIT/USDT, MATIC/BNB, NEO/BNB, PAXG/USDT, PEPE/USDT, SANTOS/USDT, SUSHI/BNB, SUSHI/BTC, SXP/BNB, SXP/BTC, THETA/BNB, THETA/BTC, TKO/USDT, TLM/USDT, TRX /BNB, TRX/ETH, WBTC/ETH, XMR/ETH, XMR/USDT, XVS/BTC, XVS/USDT, ZEN/USDT.

For now, users will not be able to add liquidity to these liquidity pools from today. However, the liquidity of the liquidity pools listed above will still remain accessible to ensure that users are provided with a trading experience. 

Users will also still be able to redeem and withdraw their assets from the respective pairs on Binance Spot before the closing date on September 1, 2023. User deposits in the liquidity pool will be calculated following the current composition of the respective pool and then it will be converted to the user’s Spot wallet automatically.

According to the announcement, the removal of the liquidity pools listed above will not hinder other trading respective pairs on Binance Spot and users will still be able to trade on other liquidity pools that are currently available on Binance Liquid Swap.

This marks the second time Binance has eliminated liquidity pools this month. On August 9, 2023, Binance also announced that the exchange would stop about 38 liquidity pools on August 18, 2023.

Binance Coin (BNB) price chart from Tradingview.com

Multiple Charges Hinder Binance’s Business

Amid these developments, the Binance crypto exchange continues to deal with regulatory pressures that seem to be affecting its business. Firstly, Visa and Mastercard are slowly cutting their ties with Balance due to the multiple regulatory actions from the US Securities and Exchange Commission (SEC) against the exchange.

One of the allegations brought against Binance is that the exchange has been operating under an unregistered business and misled investors about the company’s risk.

Also, the US Commodity Futures Trading Commission (CFTC) in May brought multiple charges against the exchange for what it calls a “willful evasion” of US law.

Among the hurdles the exchange is also facing include allegations that the US Department of Justice is looking into the exchange and is considering charging Binance for fraudulent activities.

On August 23, 2023, Binance announced on X (formerly Twitter),  that the exchange’s card known as the Binance Card will no longer be available to users in Latin America and the Middle East.

Traders’ Patience Fades: Bitcoin Price Stuck At $26,000, But Can It Hold?

The Bitcoin price has barely moved a few hundred dollars since late last week, but a vital metric hints at another aggressive move. In the meantime, the cryptocurrency is likely to keep trading sideways until another liquidation event flips momentum into a specific direction.

As of this writing, Bitcoin trades at $26,100 with sideways movement in the last 24 hours. In the previous seven days, BTC recorded similar price action while other tokens in the top 10 moved in tandem except for Binance Coin (BNB) and Solana (SOL).

Bitcoin price BTC BTCUSDT

Bitcoin Price On Brink Of New Liquidation Event?

As the Bitcoin spot price trends sideways, most of the action turns to option contracts where “smart money” is positioning for a big move. According to a report from derivatives platform Deribit, traders in the sector are betting on the long side solely based on the potential approval of a Bitcoin price spot Exchange Traded Fund (ETF) in the US.

Thus, most traders have been buying call (buy) contracts for Bitcoin to rise above $30,000 by the end of the year. These might have been betting on the regulator and courts to announce a decision from the many petitions or because of the case filed by asset manager Grayscale.

Neither of these events has come to fruition, which has led to a decline in the overall sentiment across derivatives. As the spike in call buyers suggested, this sentiment has been primarily bullish but will likely turn negative as the US stalls its Bitcoin price spot ETF decision.

Deribit stated:

Constant positivity on ETF approval has been the main driver for medium-long-term Call buying. And yet as this moves out the timeline from Q3 to Q4 to even ’24, patience is running thin. With delays, drifting confidence & macro headwinds, we start to observe downside hedges.

These hedges might have contributed to the Bitcoin price’s recent action as operators sell their spot position to cover their call contracts with late expiration. In that sense, the main catalyzer was the liquidation cascade that the cryptocurrency experienced when moving around $29,000.

At that time, as BTC trended sideways, open interest across the derivatives sector trended to the upside. As pointed out by an analyst, a similar situation is taking place currently and could lead to another aggressive move with a downside potential.

Cover image from Unsplash, chart from Tradingview

Bitcoin Bullish Uptrend Remains Unbroken, Here’s Why

Bitcoin price is currently trading at slightly above $26,000 per coin, but is still reeling after last week’s 10% single day selloff. The situation looks dire for crypto bulls who were hoping for a more significant recovery to begin after such prolonged sideways.

However, the bullish market structure remains unbroken. Let’s take a closer look at what exactly this means and why the 2023 uptrend is still intact.

Recapping Recent BTCUSD Volatility

After a solid start to 2023 – certainly a year that’s been kinder to the king of cryptocurrency than 2022 – BTCUSD has bears celebrating and bulls kicking their wounds. Several months of sideways price action and dwindling volatility ended with a bang as expected, but the move was down and not what bulls had been hoping for.

A sharp, 10% intraday selloff caused more long liquidations than the FTX collapse, and sent the Relative Strength Index immediately into the most oversold territory in all of 2023. But even with all the carnage, Bitcoin remains in a near-term uptrend with a bullish market structure.

bitcoin bullish uptrend

Why Bitcoin Price Remains In A Structural Uptrend

By pure definition, an uptrend is a series of higher highs and higher lows. Which is precisely what is still happening in BTCUSD price action throughout 2023. Currently, the FTX collapse in November 2022 was the local “low” of the downtrend. In contrast, a downtrend is a series of lower lows and lower highs. Once a new high was made in early 2023 and then a higher low was put in, the downtrend was considered over.

The recent 2023 uptrend in Bitcoin hasn’t yet made a lower low after a lower high. Even a possible lower low beyond here is still without a proper lower high. This means that the top cryptocurrency by market cap could potentially bounce here, or even lower, and still maintain an overall bullish market structure.

A lower low would still be important, potentially warning that the market structure is turning back bearish. If a lower low happens below the $25,000 low from June 2023, then it will be all eyes on if a lower high is to follow.

The 2023 uptrend in Bitcoin has been muted compared to what the cryptocurrency is capable of. BTCUSD is up roughly 50% during the first roughly nine months of the year. The final nine months of 2020, for example, had over 900% ROI by comparison. Could this type of returns soon be on the way? Or will the cryptocurrency market fall back into the clutches of bears?

This chart originally appeared in Issue #18 of CoinChartist VIP. Subscribe for free.

Another Bitcoin Metric Is About To Reach A New All-Time High Despite The Bear Market

The price of Bitcoin has taken a beating in the past month. The leading cryptocurrency by market cap is down by more than 11% from its price in July and has lost more than $50 billion in market cap since then. 

While the price plunge has been painful for investors, Bitcoin miners have also been feeling the sting as mining revenue per computing power has been dwindling for the past few months. On the other hand, Bitcoin’s hashrate has soared to high levels as mining farms continue to come online.

Bitcoin Hashrate Reaches All-Time Highs Despite Bear Market

Over the last year, Bitcoin’s hashrate (the total combined computing power of miners) has almost doubled. Data from Blockchain.com shows that the Bitcoin network hash rate surpassed 414 terahashes per second (TH/s) for the first time on August 16. 

This metric has since retraced to 390 TH/s, but it is expected to rise further in the coming weeks as miners bring on more computing power to break even on their mining operations. The higher the hashrate, the more difficult it becomes to mine BTC and earn rewards. This means that miners are now making less BTC per terahash of computing power than ever before. 

Data from Hashrate Index shows this figure is now at $0.06016 per terahash/second per day. In comparison, this figure was at $0.08124 on May 8 during the rise of Bitcoin Ordinals and Inscriptions. A further decline from here would see mining revenue fall below the lowest point in November 2022.

How Miners Are Adapting To Stay Profitable

The Bitcoin mining industry has proven itself resilient, even during the depths of the crypto winter. According to data from investment information platform MacroMicro, the current average cost to mine a BTC stands at $45,877 with the current price of BTC now at $25,936. 

Bitcoin price cap chart from Tradingview.com (Metric)

To remain profitable with the rising hash rate, Bitcoin miners have had to adjust their operations. Publicly traded mining companies like Marathon Digital and Riot Platforms have had to raise about $440 million through stock sales. 

Bitcoin miners have also avoided selling their $900 million BTC, as it could trigger a major selloff from investors. While previous on-chain data have shown miners sending a significant amount of coins to exchanges, miners have been expanding their reserves recently. 

BTC Mining Outlook

The outlook for Bitcoin mining economics in the coming months is uncertain but potentially promising if the hashrate continues to increase. The next Bitcoin halving is expected to take place in April 2024, slashing block reward by 50%. 

When the halving occurs, things could even get tighter for miners, as they would have to increase mine more blocks to break even. Nevertheless, big BTC mining companies are already on track for this adjustment. Marathon Digital, for example, was able to achieve a 54% boost in its hashrate during the second quarter but reported a net loss of $21.3 million.

CryptoQuant Discusses How Bitcoin Has Changed In Past 1 Year

The on-chain analytics firm CryptoQuant has discussed how the Bitcoin market has changed during the past year.

Bitcoin Has Been Going Through Some Changes Recently

In a new post on X, CryptoQuant has broken down the changes that the cryptocurrency’s landscape has observed recently. The first would be that the US-based exchanges have been registering withdrawals, while the global platforms have seen growing holdings.

The relevant on-chain indicator here is the “exchange reserve,” which keeps track of the total amount of Bitcoin stored inside the wallets of a centralized exchange or a group of exchanges.

First, here is a chart that shows the trend in this metric for the foreign platforms:

Bitcoin Exchange Reserve

The above graph shows that the Bitcoin exchange reserves for Binance, Bitfinex, and OKX have increased during the past year. In total, the indicator’s value for these non-US platforms has increased by 10% in this period.

This increase would naturally suggest that these exchanges have seen net deposits in the last year. However, the exchange reserve for the US-based platforms paints a different picture.

Bitcoin US exchanges

While the foreign exchanges have seen deposits, the platforms based in the US, such as Coinbase, Gemini, and Kraken, have observed declining reserves during the past year.

In general, the reserves of these platforms have dropped by at least 30%, which is a very significant value. The opposite trends being followed by the two groups of exchanges could imply a migration of coins between them, with investors increasingly preferring the non-US platforms.

The second change in the BTC market is that institutional investors have started displaying an accumulation behavior. “Considering the amount withdrawn and the deposit and withdrawal records of the wallets, institutions are continuously buying Bitcoin,” explains the analytics firm.

CryptoQuant notes that in August alone, Gemini has seen a huge withdrawal of more than 20,000 BTC, which can be a sign that institutional investors are buying.

Bitcoin Gemini

Finally, there is a change in how market participants have been looking at the futures sector recently, as they have increased their exposure to derivative products.

The ratio of the trading volume of the asset between spot and derivative platforms has dropped to pretty low values recently, a sign that activity on the derivative exchanges is overwhelmingly more than on the spot ones.

Bitcoin Trading Volume Ratio

The open interest, a measure of the number of positions open on the derivative market, also showcases this change, as the metric’s value hit very high just recently.

Image

The chart shows that while the open interest was at highs just a while ago, it has since observed a plummet. The reason behind this plunge was the latest Bitcoin crash, which resulted in a cascade of liquidations in the market.

BTC Price

Bitcoin is trading around the $25,900 level, unchanged from one week ago, showing how stagnant the cryptocurrency has been recently.

Bitcoin Price Chart