Bitcoin (BTC/USD) dropped by 11% to as low as $407 this weekend, challenging lows reached two weeks ago.
Last week, it again failed to overcome resistance in the 460’s amid successively weaker attempts. Bitcoin held in a tight range between $430 and $460 for much of the two-week stretch since its previous low, exhibiting several sharp falls followed by gradual recoveries. The recent behavior suggests instability in the current price plateau.
Also worth noting is the reversal of the “China premium” that had become a hallmark feature of the recent rallies. Bitcoin on Chinese exchanges is now trading roughly 2% lower than elsewhere, suggesting that Chinese markets may now be dragging the markets lower. During the early November spike to above $500, the China premium occasionally exceeded 6%.
Reported volumes from Chinese exchanges continue to set new records. According to data on bitcoinity.org, 3.86 million bitcoins were traded globally on December 26. Over 90% of the total is reported from Chinese exchanges, mostly Huobi and OKCoin. As most bitcoin exchanges are unregulated, the figures cannot be verified.
This time last year, bitcoin fell hard prior to and during Christmas and ended a dismal 2014 on a weak note, challenging 14-month lows.
This weekend’s drop brought bitcoin back to 6.2% of its 50-day moving average. Bitcoin has traded above this mark, uninterrupted, since October 2.
Bitcoin is currently trading at $419 on Bitstamp. The price action of litecoin (LTC/USD), currently trading at $3.45, was once again muted. The LTC/BTC rate rose to as high as 0.0085.