Bitcoin’s (BTC/USD) most impressive rally since November has fizzled, its traded price falling sharply by over 15% to below $250 on BTC-e.
It had rallied to past $300, possibly due to the excitement surrounding the launch of Coinbase’s bitcoin exchange. However, soon after launch, bitcoin’s price fell faster than it rose, piercing $250 within six hours. The rapid drop on volumes exceeding 5,000 BTC ($1.4 million) per hour had observers commenting that speculators were buying on the rumor, selling on the news.
In addition to rising above $300, BTC had achieved another milestone in breaking above its 50-day moving average for the first time since December. The rally brought back memories of November 2013 for some, and the milestones signalled that perhaps additional gains were in the works.
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BTC has still retained the bulk of its gains since hitting a bottom of $162. It is not impossible that the sharp pullback is simply a healthy retracement before the next advance. Though piercing $250 on a few occasions, some short-term support has formed around the mark.
Litecoin has fallen back below $2 to $1.92 on BTC-e, its losses more muted than bitcoin’s.
The drop reinforces the notion that the launch of asset trading on new venues has no tangible impact on its core value. Some of the harshest downturns in crypto prices have occurred post their addition to new trading venues or their acceptance by notable businesses.
Currently trading at $255, bitcoin prices on BTC-e are about $6 (2.4%) below those of its peers, an above average offset.