Hack Warning: Binance Smart Chain Stops Operations
BNB Sinks into Support Following Massive Hack.
Earlier today, Binance’s proprietary Binance Smart Chain suffered a cybernetic attack that resulted in the loss of 2 million BNB, worth over $500 million. Before the hack, BNB was trading around 297 against the US Dollar and was trending up since September 19; at the time of writing it is trading at $285, coming off lows at $278.
Following the hack, BSC is temporarily paused but according to Binance’s CEO Changpeng Zhao (CZ), clients’ funds are safe. Taking to Twitter, he wrote “An exploit on a cross-chain bridge, BSC Token Hub, resulted in extra BNB. We have asked all validators to temporarily suspend BSC. The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.”
According to Binance’s official Twitter account, the BNB Chain is currently undergoing maintenance and all deposits and withdrawals are halted. “We will suspend all deposits and withdrawals via BNB chain temporarily until there are further updates. We apologise for the inconvenience. Thank you for your patience!”
The attackers were able to exploit a cross-chain bridge vulnerability, tricking the BSC Token Hub to send 2 million BNB in two transactions (1 million each). According to early reports, the stolen funds did not belong to clients and were not in circulation before the attack.
Technical Outlook – BNB/USD
Soon after the hack, BNB/USD dropped to a low of $278 but the panic subsided relatively quickly and the pair climbed to $285 after a few hours. The attack was definitely a catalyst for the drop but the pair’s behavior is not out of the ordinary, as the technical reasons for a pullback were already in place.
BNB/USD was trading at the top Bollinger band, in close vicinity to the massive resistance at $300 and the Relative Strength Index was already overbought on a 4-hour chart. Furthermore, the price printed a double top (which is a bearish pattern by itself) but the RSI printed a lower high. This is a form of divergence, although not as strong as the regular one where the price makes a higher high and the indicator makes a lower high.
Lately, the pair has been trading inside a rising channel and the recent drop took it into the lower part of the said channel, which coincides with the lower Bollinger Band. This could suggest that unless we are dealing with a true break of the rising channel, we can expect to see a rebound into the $290 area.
If a channel break occurs, the pair is headed toward the recent lows at $278, which could trigger additional selling pressure. The following support is located around $267 – $270.
