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Bitcoin is continuing the fight with the $345-$350 support area. Earlier in the day it looked like the bears had won, after breaking past $345 prices quickly fell to a daily low of $337. But in the next 2 hours BTC/USD climbed back above $340 and few hours later prices were again flirting with the $350 figure. Here’s an updated chart.
We are now in somewhat of a stalemate with prices wedged in between two support/resistance areas. A move below today’s low at $337 will likely accelerate bitcoin’s losses. On the other hand. if BTC manages to climb and stay above the $362 resistance level (marked in the chart above), it will likely signal an end to BTC losses, at least in the short-term. To spark a new rally in the cryptocurrency however, BTC/USD will first need to take out the October 14th swing high at $408.
Let’s look at some of the support levels if bitcoin breaks $337 and continues the move lower, since this is the more likely scenario. The first potential support can be found at the $300 round figure. This is quickly followed by the October 5th swing low at $285. Lower still, the $266 figure, a high for bitcoin during most of 2013, will be strong support to falling prices.
The latest leg down in BTC/USD can not be pinned to one unexpected negative news event, unlike the two falls earlier this year with the MtGox fiasco and later with the China Ban. Several theories have been floating around about the reason behind the price declines, ranging from bitcoin mining to increased merchant adoption with a corresponding increase in consumer interest to pay with BTC. But the biggest factor may be …read more