Bitcoin dipped 1.6 percent as Benjamin Lawsky, the Superintendent of the New York Department of Financial Services, held a speech at the Cardozo Law School. Prices fell from $398.50 to $392.10 in six minutes but later rebounded somewhat.

As the day progressed however, the BTC selling continued and Lawsky’s speech probably had something to do with it. While the Superintendent calmed software developers and individuals miners by saying that they won’t be required to get a licence, the same can’t be said for a whole range of other companies that hold customer funds. While mining itself will not be regulated, if the miner engages in other virtual currency activities, like hosting wallets or exchanging virtual currency, a license may be required. This may affect current mining pools, many of whom temporarily hold the funds of individual miners in online wallets.

The NYDFS will make some changes to the original proposal published in July based on the comments it received. But when it comes to cryptocurrency companies that provide financial services or hold customer funds, the new regulation will likely come into force mostly unchanged. The comment period on the original draft will end on October 21st. Then, the NYDFS will publish the new version proposal, after which a new 45 day comment period will begin. Lawsky expects the new regulatory framework regarding cryptocurrencies to come into law by December 2014 or January 2015.

Bitcoin Trading Weaker in Past Two Days

Bitcoin is trading somewhat weaker after reaching a swing high of $408.20 two days ago. Prices lost 12 points on Wednesday and look set to close another day in the red. Bitcoin is currently hovering right above the important $381 level. This figure was the swing high reached during the initial BTC rally from $285 and has now turned into a support level. Prices already tested this level on two occasions today, dripping to $380, only to be quickly repelled higher. But the longer BTC/USD keeps hammering on $380, the more likely we are to see a move lower.

Below $380, the first potential level of support lies at the $343-$350 area. Lower still, the round $300 figure may provide some support, followed by the October 5^th swing low at $285. On the higher end, the first potential resistance can be found at the $408 ($410 to round it off) mark. Higher up, the next hurdle for the bulls will be the post-PayPal high near $450.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.