Bitcoin’s traded price has given up about a third of the gains from its June rally, slipping below $240. It now finds itself in roughly the same position as during the recent 2-month stretch of flat trade.
Prices had rallied by as much as 17% from their late May lows near $220. Their current profile leaves open the possibility that this week’s drop was but a brief retracement and that the rally remains intact. But a further drop into the mid-$230’s may suggest that the recent hot streak was merely a blip in a prolonged period of flat trade.
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Bitcoin still remains above its 50-day moving average (MA) by roughly 2%. It had adhered closely to its MA for the six weeks prior to the rally, and crossed it frequently since recovering from the January sell-off.
Litecoin, which has also followed bitcoin in coming off recent highs, has still retained the lion’s share of its gains, trading at $2.88. The LTC/BTC rate, therefore, is only slightly off the 0.012 levels held during most of the week.
For both coins, there has been little by way of fundamental developments to rationalize their recent jumps. In the case of bitcoin, some investors may be keeping an eye on the block size debate and possibly more ‘stress tests’, which may yield insight into its future sustainability and the feasibility of mass adoption.