After two days of losses, bitcoin is getting close to the important swing low at $339 per coin. The fall triggered a decline in other cryptocurrencies as well. Peercoin fell below the important $0.70 level and Litecoin hit a low of $3.42 today.
Bitcoin Breaks Out of Wedge, Eyes $339
Bitcoin broke out of the wedge mentioned in our article last week. Yesterday’s $10 dollars decline was followed by a larger $19 dollar drop today that saw prices hit a low of $340.83. This is right above the $339 swing low.
The daily chart above shows some of the important support/resistance levels for bitcoin. If BTC/USD manages to take out $339 per coin, the next potential support stands at $319. This is followed by the $300 round figure and the October 5th swing low at $285. Lower still, the $266 mark, the highest high for bitcoin during most of 2013, may also present support to prices. If the sellers can take out $266, we may enter a longterm bear market.
Fundamentals Uncertain
The fundamentals for bitcoin are unclear. We still don’t have reliable figures for the two important risk events last week, Bitcoin Black Friday and the second BTC auction. Anecdotal evidence, judged by the number of transactions on the network, suggests that Black Friday didn’t generate a lot of sales for bitcoin merchants this year. Yesterday the US Marshall Service distributed the 50,000 BTC to the auction winners. But unless the winner(s) decide to come forward and disclose their auction bid, we may never get the price per coin bid.
Peercoin Moves Below $0.70
Alternative cryptocurrency Peercoin broke the important support at $0.70 today. An earlier foray below $0.70 last week ended in a reversal rally that took PPC/USD to $0.73. From here, PPC staged a renewed attack on $0.70 and after some resistance by the bulls, prices fell to $0.675 today.
It’s not an accident that Peercoin stopped right at the $0.675 mark. This is the exact September 9th swing low. If prices manage to break $0.675, PPC/USD may fall toward the round $0.60 figure. Lower still, the yearly low at $0.565 will be an important milestone for PPC. A move below here may usher in a period of longterm losses for Peercoin. The half-parity level at $0.50 may also support prices on the downside.
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