Bitcoin (BTC), the largest cryptocurrency by market capitalization, is struggling to stay above $80,000 U.S. following a big post-election rally after the American midterms.
The price of Bitcoin jumped above $80,000 U.S. on Nov. 5 amid a huge rally in U.S. stocks as the Democratic Party won a decisive victory in the midterm congressional elections.
Bitcoin rose as much as 4% on the day, while other digital assets such as Ethereum (ETH) gained more than 6%.
However, BTC is again sliding lower in early trading on Nov. 5 and its price is back below $80,000 U.S., changing hands at $79,580 U.S.
Bitcoin had weakened throughout the month of October after rising more than 40% in the third quarter of the year and getting as high as $86,000 U.S.
But the price dropped as low as $76,000 U.S. after it was revealed on Oct. 30 that Binance, the world’s largest cryptocurrency exchange, had lost a record $6.3 billion U.S. in a cyberattack.
Hackers were able to breach Binance’s defenses and steal billions worth of Bitcoin, which they quickly moved to digital wallets outside the exchange.
The incident has shaken confidence in the security of the crypto sector and raised questions about threats to digital assets posed by artificial intelligence (A.I.) and quantum computers.
Since the hack, investors have pulled nearly $12 billion U.S. in crypto and cash from Binance’s exchange.
There have also been steady outflows from exchange-traded funds (ETFs) that track the spot price of Bitcoin.
The situation has weighed down the price of Bitcoin and made its difficult for it to regain the key support level of $80,000 U.S.
Analysts say rising and staying above $80,000 U.S. is critically important if Bitcoin is going to reignite the rally seen throughout the third quarter, particularly in September of this year.
Year-to-date, BTC is down 9%.
