Bitcoin’s (BTC/USD) bounce from 14-month lows has hit some stiff resistance just below $220, raising the specter of the low $200s becoming the new near-term norm and of further declines in the works.
BTC is currently trading at $208 on BTC-e. After jumping to near $220 yesterday, it has failed to gain much ground. It has converged tightly toward current price levels during the past 24 hours, in stark contrast with the lingering volatility we had become accustomed to during the 72 hours prior.
BTC is continuing to set lower peaks, suggesting some instability in its residing above the $200 mark. The direction of the next big move, however, remains highly uncertain. A break past the $220 and $230 marks could have significant upside implications as short sellers race to cover positions.
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Prior to yesterday’s jump, BTC also showed some support around the low $190s, the de facto floor upon the return of calmer trading conditions.
Adding uncertainty to BTC’s next move is the fact that it has barely retraced 50% of its losses from above $300. Downturns from the previous August through December have witnessed retracements typically higher than 70%. As is usually the case, the flattening profile makes for a difficult survey. Traders have little to lose by waiting on the sidelines.
Prices on BTC-e are about $3 (1.4%) off from those on its peers, a return to its normal offset.