Cryptocurrencies Wait for Cues From Bitcoin

FXOpen

The rout in cryptocurrencies continued after a slower holiday period. On January 3rd BTC/USD broke below the important $300 round figure, triggering losses across all altcoins. Litecoin fared the worst, losing over 28% compared to bitcoin’s 20 percent. At the same time Peercoin cleared the half-parity level at $0.50 and Namecoin got close to its half-parity level by hitting $0.55.

Bitcoin Breaks $300, Hits $266

Bitcoin’s break of $300 led to a loss of $40 dollars in two days. But the important $266 figure is managing to hold the onslaught of the bears, at least for now. Prices bottomed out at $260 on Sunday but we have been trading flat ever since, with neither the bulls nor the bears having the upper hand.

jan6-btc1

We are currently quoted slightly above $266 at $271 per coin. This level is important because it marks a previous swing high for BTC. The $266 mark was the highest high for bitcoin during most of 2013. It was the highest high reached during the April 2013 rally from $93 dollars. It was also the breakout point for bitcoin’s latest rally during November of 2013.

jan6-btc2

In a lot of ways, $266 may turn out to be a crucial milestone. If we break below, it will mean that BTC/USD would have retraced all of the gains from its latest rally. This can potentially shift the longterm trend to the downside as well. So far, only the medium and short-term trends have been down. To give some hope to the bulls and end the short-term downtrend, BTC will need to climb and stay above $300 dollars per coin.

BitStamp Hack Adds Fuel to the Fire

The hacking of BitStamp, one of the top bitcoin exchanges by trading volume, just added fuel to the already negative momentum. According to the latest update, the exchange has lost ‘’less than 19,000 BTC’’ or about $5 million dollars’ worth of bitcoins. Bitstamp CEO Nejc Kodrich said:

“This breach represents a small fraction of Bitstamp’s total bitcoin reserves, the overwhelming majority of which are held in secure offline cold storage systems.”

As of the posting of this article (January 6th), the exchange is still offline. BitStamp decided to completely stop trading while they’re trying to fix the security issues. Trading is still open on other bitcoin exchanges however, including on Fxopen.

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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.

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