Cryptocurrencies continue to experience high volatility after the Coinbase-induced rally fizzled out yesterday. Bitcoin hit a high of $303 before descending to a low of $241.09 today. Peercoin peeked at $0.517 before falling back and Namecoin hit $0.653 in yesterday’s trading session.
Coinbase Announcement Triggers Rally
Bitcoin hit a high of $303.30 yesterday as Coinbase launched their new exchange. The company managed to secure regulatory approval to operate in 24 US States so far. These include New York and California. The fact that the new Coinbase exchange will be available to NY residents probably means that the company is already in compliance with the proposed ”BitLicense” framework. The New York Department of Financial Services is expected to implement the new cryptocurrency rules in the first quarter of 2015. Trading on Coinbase will be free until March 30th, after that, the exchange will implement a market maker/taker formula. Market makers, traders that add liquidity by placing orders in the orderbook, will continue to trade without fees. Market takers will be charged 0.25 percent.
Bitcoin Hits $303 but Falls at 9 AM EST
The initial Coinbase announcement was planned for 9 AM EST. The company even made a special webpage for the launch called Lunar, with a caption that said only ‘’To The Moon’’ and a timer set to run out on January 26th at 9 AM. But for whatever reason, the Wall Street Journal was given the story almost a day early and published the news ahead of time. This led to a rally across the board. Then as 9 AM rolled around in a classic ‘’buy the rumor sell the fact’’ BTC/USD got sold aggressively. Prices fell from $294 to a low of $250 in two short hours.
The decline continues today with BTC falling a further 9 dollars to $241 per coin. While the initial move above $266 was bullish, the massive rollback means that bitcoin is now back into uncharted territory. To resume the rally, BTC/USD will need to climb above $303 per coin. Support on downside can be found at the $226-$233 area, followed by the round $200 figure.
Reversal in Peercoin Prices as Well
Peercoin also experienced a massive reversal as it followed bitcoin’s fortunes, first up and then down. The initial rally hit a high of $0.517 and it’s been downhill ever since. We are currently trading at $0.374 per coin.
To restart the rally, PPC/USD will need to climb and stay above the half-parity level at $0.50, not just briefly spike above it like it did yesterday. On the downside, we find some weak support at the previous swing high of $0.359. Further down, this year’s low at $0.24 may act as support. But if PPC can clear the level, more losses may ensue.