After a weak recovery yesterday, BTC has pushed convincingly higher today.
BTC has pushed above $960 on MtGox on heavy volume, at one point seeing 3500 BTC exchanging hands in 2 hours- the greatest spike in trading volume since 9 days ago. During that period, price movements were also positive and BTC flirted with 1000 for much of the day. In contrast, trading volumes during long, gradual periods of decline during the interim have been low to moderate, and spread out over longer periods.
This may be a trading signal for the trading phase of the last 2 weeks: Prices are only spiking upon heavy volume, implying impulsive rushes of unbridled buying followed by momentary speculation that the cryptocurrency is taking off. As the pressure is released, prices are gradually drifting back to their typical trading range with some profit taking.
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BTC is encountering fierce resistance in the $960-980 range during the past week. Considering its even stronger support level of $870, it has formed a fairly tight trading band in 2014 relative to its wild finish to 2013.
The strong performance comes despite recent announcements from a number of governments that the cryptocurrency will not be considered as legal tender. Canada has said that “only Canadian banknotes and coins are recognized as legal tender in Canada”, according to Wall Street Journal. In Finland, Bitcoin failed the currency test and was deemed a commodity. Norway has also confirmed that it doesn’t qualify as a currency, while Denmark is weighing recommendations from lawmakers on how to treat Bitcoin and its digital peers.