Bitcoin (BTC/USD) spiked suddenly to as high as $450 on BTC-e following the revelation of PayPal’s next move into Bitcoin.
BTC had been languishing in the 380’s, showing no real sign of direction after plummeting to $370 a few days ago.
When the news broke, BTC rocketed by over 18% within 2-hour span, its sharpest rise since emerging from the flash crash last month.
However, excitement seems to be waning. BTC has drifted back as low as $410, which served as an impenetrable support level for 4h. It has now recovered to $415 but the threat of return to recent lows remains present.
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It is worth noting that despite multiple reports of PayPal cozying up to Bitcoin during recent months, the market hasn’t rewarded the currency with higher valuation.
$370 is currently holding up as a reliable level of support. Short-term declines beyond this point are unlikely. Mid-term, however, BTC is sitting in a vulnerable position, with little support between current levels and $200.
BTC-e prices are within $8 (2%) of those on Bitstamp, a reduction of the $11 gap observed during the lows near $380. This is consistent with the recent trend of greater divergence in down markets.
Litecoin (LTC/USD) exhibited a similar profile, spiking by 22% to $4.90, then retreating to $4.60. LTC’s rise was more exaggerated than that of BTC, and it has held onto more of its gains. Vs BTC, LTC is trading at 0.01107. Potentially boosting LTC was the inclusion of GoCoin in the PayPal’s partnerships, who offers both LTC and Dogecoin (DOGE) merchant services.