Bitcoin Gains Back Some Ground, Peercoin Falls
Bitcoin gained back some of the lost ground in the last three days. After the auction announcement sunk prices, BTC trended down for few days until bitcoin bottomed out at $339 on November 21st. Since then, the fledging cryptocurrency has been in a steady climb up. The gains accelerated after BTC/USD broke above the weak resistance at $370 on Monday, leading to a daily high of $388.999 today. We are currently trading just off the high at $381 per coin.
As can be seen from the chart above, bitcoin has now reversed almost all of the losses accrued by the auction announcement. This is very similar to what happened back in June, during the first bitcoin auction. Back then, BTC traded at $628. After the news hit the wires, a down move began and during the next few days BTC/USD eventually hit a low of $546.33 on June 14th. In the next three weeks, a bitcoin rally took prices to over $650 per coin on July 1st. This time, the V-shaped move happened a lot faster, which may be due to market participants learning from the previous auction.
Support/Resistance Levels
Let’s take a look at some of the support/resistance levels. On the topside, we have a resistance area between $400 and the swing high at $408.20. A clearing of this area may lead to some gains toward the important $454 mark. This level will be an important milestone for BTC going forward. The $454 number is where the last short-lived bitcoin rally fizzled out. A move higher could trigger a new bitcoin move up. On the downside, a move below $339 will likely put an end to the gains. Lower still, a break of the swing low at $319 could usher in a period of losses for bitcoin.
Peercoin Falls After NuBits Dividend Buying Ends
Last week alternative cryptocurrency Peercoin rallied 13 Percent on buying for the upcoming NuBits Dividend distribution. But soon after the purchases stopped, PPC/USD fell back down to a hit a new swing low of $0.70 per coin. We are currently trading at $0.753 per coin. The cryptocurrency is somewhat wedged between a resistance area at $0.80 to $0.834 and a support area at $0.70 to $0.73.
The selloff was expected, I posted this in my article few days ago:
‘’It would seem logical that once the buying spree ends (over the next few days), PPC should return to its previous downtrend. But then again there is a small chance that this event will shift the market’s perception of Peercoin and traders will now start to buy up PPC in anticipation of future NuBits dividend purchases.’’
Another factor to consider is how much of the PPC received as NuBits dividend will now be sold on the market. Keep in mind that Peercoin has been supported by the bitcoin rally during the last three days. If this support stops and BTC falls back down on disappointing auction results, PPC could be sold aggressively due to its current weakness.