As anticipated, the euphoria from PayPal’s next step into Bitcoin has worn off– and then some. No more than 5 days after bitcoin (BTC) was sent soaring to $450 on the news, it has slid back beyond the $380 starting point.
Minutes ago, BTC hit yet another 2014 low of $361 on BTC-e and is now trading at $367. Excluding abnormal trading conditions (e.g. flash crashes), these prices break the tenuous $370 short-term support level, BTC’s previous 2014 low set 10 days ago. While $370 did provide some support in the immediate term, it is still a highly vulnerable price point. There is little historical precedent for support between $200 and $400. The current decline may continue at its gradual pace as pre-November 2013 investors contemplate cashing on their profits.
BTC is now 31% off its 200-day moving average (MA), which is also a new 2014 low.
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Volume has been moderate, averaging about 300 BTC per hour for the past 12h.
BTC has not gained more than 5% since the PayPal-induced spike.
Interestingly, most other coins are well into positive territory during the past 24h. The selling has been more bitcoin-centric. The relatively low scale of loss also suggests that this is not a panicked sell-off, which would usually drag most coins well into the red. It also suggests that, best case scenario, these prices are here to stay for some time, and worst case, further declines into the low 300’s are in order.