Bitcoin Price Falls Hard as Rally Fizzles, Alts Follow Suit

Yesterday’s rise in bitcoin (BTC/USD) prices was short-lived, with BTC/USD giving up nearly 10% from its peak near $241 on

Yesterday’s rise in bitcoin (BTC/USD) prices was short-lived, with BTC/USD giving up nearly 10% from its peak near $241 on BTC-e.

A drop of 3% during the past hour has brought prices back below $220, further dimming prospects of a resumption of last week’s rally that saw prices shoot above $300.

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Capital investment in Bitcoin ventures has shown no sign of slowing, with investors pouring in over $100 million into the industry year-to-date. Yet, aside from last week’s brief pop, prices have continued to struggle. The disparity reinforces a growing consensus that Bitcoin’s future promise lies in its technology, and not necessarily in its value as a full-fledged currency.

Volumes continue to be choppy, averaging 300-400 BTC/hour but shooting above 1,000 during the current drop.

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BTC-USD, Feb 4

The trajectory of the current drop suggests that it is not yet over; it is likely that $215 will be broken during the next 24h.

Litecoin and most other alts have followed bitcoin lower. Their bitcoin-denominated prices have remained largely stable, but their dollar-based valuations falling due to bitcoin’s declining price.

Litecoin has fallen to $1.75, but the LTC/BTC rate continues to show stability near 0.008.

Prices on BTC-e are $3.50 (1.6%) lower than on its peers, an average offset.

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