In an unexpected turn of events, bitcoin (BTC/USD) prices unexpectedly shot higher this weekend, surpassing the symbolic $300 mark for the first time since late January.
Bitcoin’s very gradual upward progress during the past 6 weeks had appeared to hit a snag, failing to advance past $280 even as litecoin racked up multifold gains.
Bitcoin just hit a high of $302 on Bitstamp, gaining 11% during the past 48h. It now sits 10% above its 50-day moving average (MA), which itself has been rising thanks to a recent streak of stability.
Litecoin, however, fell hard. It had soared as high as $8.65, its highest level in over a year, bringing total gains to over 500% since May 1 and 700% since nearly falling below $1.00 in late January. But once the speculative momentum was depleted and short sellers were run out of the market, the floodgates opened: litecoin lost 58% to as low as $3.61 in just over 24h. It has since bounced back to $5.00.
Litecoin had actually surpassed Ripple for second place in market cap, a seemingly impossible feat after being worth only one tenth of Ripple’s value as of mid-January. Ripple had surpassed litecoin in October after trailing it for much of 2014.
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With their sudden reversal in fortunes, the LTC/BTC rate retreated sharply to as low as 0.012- a drop of over 60% from 0.032- its highest since March last year, when litecoin was trading above $20 amid hype of its addition to BTC China.
There had been reports that litecoin prices were manipulated by pump-and-dump activity in China, but these have yet to be verified.
More Recovery for BTC?
Bitcoin’s rise above $300 is a symbolic milestone capping what may have been a months-long bottoming process. Its two forays above the mark in 2015, however, were short-lived. Its prospects of a larger recovery may be foretold by its ability to establish ground in the new range.
Undoubtedly, speculators into the Greece crisis have been at least partially responsible for pushing prices higher. The matter may finally come to climax early this week (though this is no guarantee). Whether another deal is secured or Greece exits the euro, the uncertainty crucial to fuelling speculation may vanish, taking the wind out of bitcoin’s sails.
Last year’s July was also a turning point for prices, which came off multi-month highs in the mid-$600’s, and proceeded to shed over half their value by year’s end.