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Bitcoin is down $7 dollars on BTC-E. After opening at $269.79 bitcoin to a low of $260.12 in the early morning session. The rest of the day saw some stabilization in prices and BTC is currently trading slightly higher at $262.72.
A similar pattern was seen on OKCoin exchange. Here we opened at $275.46, fell to a low of $263 and we are currently quoted at $265.75. Meanwhile futures, especially the far out contracts are taking a beating. Bitcoin fell $7 dollars on BTC-E, $10 dollars on OKCoin and $12 dollars on the September 25th contract. After opening at $288.83 BTC/USD fell to a low of $273.49 in the afternoon. The late day recovery lead to small gains and this contract is currently trading at $276.80 dollars. This puts the premium over the main exchange at $11 dollars, compared to the $13 dollars seen during yesterday’s session.
Today’s price action is a good reminder that if the gains in bitcoin were to reverse, the longer dated futures contracts will be hit the hardest. This is where most of the expectations for future gains are priced in. If bitcoin were to experience a significant retracement or outright reversal, these contracts will need to re-price the premium.
At what level can we consider the trend to be over? This is difficult question to answer but my guess would be around the $245-$250 support area. A clean break below $245 dollars should end the current rally. To renew the upward momentum, BTC/USD will need to break the resistance at $270 dollars per coin. This double top formation is also a former swing high for bitcoin. A
Originally appeared at: http://www.forexnews.com/blog/2015/07/07/bitcoin-down-7-on-btc-e-12-on-okcoin-futures/