Bitcoin Wins Back Yesterday’s Losses, But Still Slumping on MtGox

Yesterday’s carnage of Bitcoin (BTC) prices is starting to look more like a passing storm, assuming you’re looking at BTC-e

Yesterday’s carnage of Bitcoin (BTC) prices is starting to look more like a passing storm, assuming you’re looking at BTC-e and Bitstamp. On those exchanges, BTC has convincingly recouped its losses, now trading back at $700- its current plateau following last week’s initial drop.

BTC has come back with a vengeance, rebounding as much as 40% from its lows near $500 which it visited at the climax of its drop when traders had just started absorbing the developments coming out of MtGox.

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It’s a whole different story on MtGox, as BTC’s value on the exchange remains in question. BTC is trading at $570 and isn’t too far off the levels visited during the climax of yesterday’s storm. Investors on the exchange will at least be reassured by its (relative) stability over the pas 24 hours and by not having fallen further.

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A day of relative quiet has allowed traders to at least temporarily forget any fears as to Bitcoin’s stability, leading to a strong recovery. Likewise, the quiet means so solution for users of MtGox and therefore no remedy to BTC’s value on it. Equally or more significant has been the overwhelming amount of reassurance from the Bitcoin community that the issues on Mt Gox’s are truly its own and not some novel discovery of a flaw in Bitcoin’s protocol.

The combination of stagnation on MtGox with a full scale recovery elsewhere means that yesterday’s new “MtGox discount” has widened to $140- a number which used to be its premium as recently as  one week ago.

Volume on all 3 exchanges has ranged in the mid to high hundreds per hour, which is still above average.

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