The price of the leading crypto-currency Bitcoin [BTC] dropped as low as $10k today with the altcoins following the same league. The dip began on Wednesday when the leading cryptocurrency exchanges like Bithumb, Binance, and Coinbase experienced issues like police raids and congestion due to high network fees on Ethereum.
Investors still holding bullish sentiments are trying to find reversal signs to purchase within this dip. Consistent with updates for data analytics firm, Coinmetrics, price quotes on Gemini are greater than other exchanges pointing towards a bullish buyer’s inclination.
Just this morning, a Gemini user revealed that he was unable to withdraw Bitcoin’s from the exchange.
Jameson Lopp, a Bitcoin programmer presented the subsequent theory for the withdrawal suspension. Explaining further, he added:
“Probably ran out of funds in their hot wallet and wish to run over to the cold storage vault so as to re-up. Bitcoin supply held by exchanges continues to decrease.”
Usually, exchanges keep multiple wallets to manage their user’s holdings. A hot wallet is a lively wallet that’s used for the daily purposes of the exchange. The cold wallets which hold the bulk of the exchange assets are employed to manage liquidity within the hot wallets. Hence, safeguarding the funds from exchange hacks & offering timely liquidity to the hot wallets. The exodus from exchange wallets has been ongoing since April as users move their funds into self custody or other private custodians.
On the other hand, Gemini – being one among the leading regulated exchanges within the United States appeared to have temporarily to have run out of its on-hand liquidity as traders rush to purchase crypto-assets while in the times of ongoing dip. Nevertheless, the funding rate on derivative exchange holds towards a bearish sentiment pointing to a deeper correction over $9k.