Bitcoin is now trading at the $8,600 mark. This is roughly $200 higher than where it stood yesterday afternoon. Could the price be recovering following Mt. Gox’s latest sell-off?
Early this week, bitcoin was marred by two major actions. The first stemmed from South Korea, one of the largest bitcoin trading hubs in the world. Financial authorities raided popular cryptocurrency exchange Upbit after executives were alleged to have been illicitly moving customer funds to their own personal accounts. At press time, no additional information has been released on this story, and The Merkle will continue to provide coverage as it is received.
The second maneuver came by way of Mt. Gox, the now infamous Japanese crypto exchange responsible for losing nearly half-a-billion in bitcoin funds in 2014. Trustees of the platform have been selling off the company’s final bitcoin stashes since September of last year, and despite acknowledging that these moves could have negative consequences on the bitcoin price, these sell-offs have continued without restraint.
Last Friday, word was received that a trustee had moved as many as 8,000 bitcoins to four separate wallets. At the time, bitcoin was already in a downward slump, having fallen to about $9,100 from its previous high of $9,800, though the move may have spawned its subsequent drop to $8,250, which is where bitcoin was trading during yesterday’s early morning hours.
Now, roughly $400 later, it’s hard to say if the coin is truly recovering, or if this is just a minor correction in what could be a further downward spiral. One analyst suggests that while bitcoin’s price is down, its dominance rate is still near 40 percent in the cryptocurrency market – the first time since early April – and the asset is still attracting investor interest. More money will undoubtedly allow the price to bounce back up, though it’s difficult to say when this will occur.
Thus far, bitcoin has lost over 10 percent of its value in just a matter of days, and daily charts are still signifying bearish trends, though these are alleged to be in the short term. At the time of writing, the trading range for the currency lies between $8,000 and $9,000 – a solid $1,000 fall from where it stood earlier this week.
Another analyst is more positive in his sentiment. He suggests that bitcoin is ultimately bouncing back from its recent lows, and pushing through present resistance faster than other coins. He suggests that if the currency can keep this momentum going and sustain its position in the market, it could lead to what he calls a “meaningful rally.” In other words, bitcoin will continue to spike, and return to the price it so proudly bore at the beginning of the week.
Previous resistance – which was set at $8,450 – has already been surpassed. Granted bitcoin can move beyond the $8,700 mark, we may see prices return quicker than anticipated.
In addition, bitcoin is garnering further institutional praise and attention following Goldman Sachs’ plans to release its new bitcoin trading desk. The cryptocurrency market is witnessing a burst in legitimacy, and experiencing stronger and curiosity from both Wall Street players and corporate investors.