Bitcoin (BTC/USD) fell 8% to a 1-week low of $425 during the past 24 hours.
The steep drop is one of several big moves that have become increasingly common since bitcoin’s resurgence in late November.
Over the past week, bitcoin ran into fierce resistance near $467. If bitcoin would advance past this mark, the prospects of revisiting $500 would be more convincing. Bitcoin’s hype-filled spike to $500 in early November is believed by some to have been driven by investors flocking to a Ponzi scheme.
Despite falling below $300 within days after the spike, bitcoin stabilized and subsequently climbed to its recent highs, lending credibility to the theory that more genuine factors were also at play during bitcoin’s initial rally.
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After hitting a low of $425 earlier today, bitcoin recovered to as high as $442 before stabilizing near $435.
It is trading 15% above its 50-day moving average (MA), which has been rising since early October. Year-to-date, bitcoin has gained 36%.
The price premium on Chinese exchanges is hovering near 3%, suggesting again that China is responsible for dragging the markets higher. During the early-November craze, the premiums exceeded 6%.
Litecoin also fell, but per the recent trend, its moves have been more muted relative to those of bitcoin. It declined by as much as 7% to $3.39. The LTC/BTC rate came off 6-month lows near 0.0078.