The crypto markets shot higher again today, hitting new highs as speculators took up positions following Greece’s resounding rejection of austerity conditions for more bailout money.
Bitcoin (BTC/USD) climbed 5.4% to its highest since March 18, hitting $275 on Bitstamp. Litecoin (LTC/USD) hit another milestone, touching $5.00, its highest level since September 15 last year. It gained 24% within 6 hours, continuing its trend of sharp bursts in tandem with bitcoin’s steady gains.
The LTC/BTC rate thus soared to 0.0186, its highest in over 13 months.
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Bitcoin’s rally, which started last month, has sent it clear of its 50-day moving average (MA) by 14%. Should bitcoin make it to within striking distance of $300, it will be a real test of its newfound strength. Earlier this year, it had trouble advancing past the psychologically key level even in the presence of fundamental catalysts.
By now, the correlation between prices and news coming out of Greece should be obvious. Though Greeks may not be necessarily buying up bitcoin (or even have the means to do so), the economically traumatic developments are almost certainly motivating speculators to move in.
One should note that the epic rally of November 2013, which saw bitcoin soar multifold to over $1,100, was at least partially catalyzed by worries over Cyprus. The initial jumps ballooned into a speculative bubble, which eventually deflated.
Here, the rise has been comparatively miniscule in scale- 31% from the April low of $210. Once the madness in Greece subsides, prices are likely to gravitate downward, the open question being if they simply give back gains or experience a sharper sell-off.