Bitcoin (BTC/USD) bounced back to above $250 this weekend, recouping almost all of last week’s losses.
Since falling as low as $239, bitcoin gained as much as 5.4% to $252, currently trading at $250. Its highest point during the last three months, $259, was reached eleven days ago.
In what had seemed to be a new regime of stability, bitcoin prices traded tightly between $220 and $240 for nearly two months. The streak ended with this month’s breakout to 10-week highs.
Last week’s retracement amounted to less than 30%, leaving open the possibility that the drop was but a brief correction in a broader recovery back toward the upper $200s. This week’s trade will likely give a better indication of where the market is headed in the mid-term.
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Since gaining 120% in less than a month, litecoin (LTC/USD) has faced resistance around $3.10. Currently trading at $3.06 on BTC-e, it has been getting less of a boost from bitcoin’s bounces during the past week. The LTC/BTC rate remains near 0.012.
Litecoin’s last foray toward $3.00 in late January was followed by a decline of roughly 50%, and it traded between $1.20 and $1.90 for the bulk of the following four months.
There has been speculation that fears of Greece defaulting on payments and its exit from the euro zone have fuelled demand for bitcoin, whose total circulation is limited. In theory, it can preserve value even while fiat currencies face attrition due to increasing supply from central banks, or while economies endure unexpected downturns. However, there has been no evidence presented of direct uptake in Greece, and at best, the Grexit effect has been speculative in nature.
As to litecoin’s unexpected rise from the ashes, it is possible that fears over bitcoin’s future sustainability have led some traders to give it a second chance. Debate has erupted over whether bitcoin can graduate toward greater adoption based on current block size limitations. Planned stress tests aim to illustrate this concern. Traders may thus be looking to cryptocurrency’s alternative assets, although litecoin may not necessarily address all the issues.