Prices of bitcoin continue to fall today after breaking below the $600 barrier on Thursday. Before Thursday’s move, prices had been in a tight range for July, trading mostly between $610 to $620. Following their initial move lower, bitcoin found support at $585 but that level was broken today, with prices hitting a low of $562 on BTC-e.
At current levels, bitcoin is trading around prices where it initially saw support in mid-June (see chart). Following bitcoin’s May surge from $420 to around $650, profit selling brought prices back around $560 in mid-June. However, demand stepped up at those levels to propel prices back above $600. As a result eyes are now back at the $560 level to see if it holds again and proves to be an area of demand. A break below $560 may trigger further selling pressure as short-term buyers that bought the current dip may exit their positions. Beyond $560, there isn’t much support until $500. Beyond just a psychological barrier, $500 also represents the 38.2% retracement level from May’s lows to June’s highs.
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