The crash in bitcoin prices on Wednesday sent shockwaves across the crypto market. Bitcoin fell by close to $40 dollars or over 15 percent. Peercoin sold off by 25% while Namecoin hit a low of – 30% at one point. What was the reason for the sell-off?
Bitcoin Crash Sinks All Ships
Two prominent Bitcoin developers released a new version of the software during the weekend called Bitcoin XT. The main goal of the new software is to facilitate bigger blocks. A ”block” is the building material of the bitcoin ”blockchain”. It holds all relevant data for the most recent bitcoin transactions.
You can read about the other proposed changes. Despite the good intentions, the new client triggered fears of a bitcoin split, meaning we would see two networks instead of the current unified bitcoin network. Several catchy headlines ”Bitcoin could split” by major media outlets didn’t help the matter.
After the break of $250, which we noted on Tuesday as an important support level, Bitcoin crashed close to $32 dollars, hitting a low of $218. Today the selling continued with prices hitting a new low at $211.05. This is very close to the double bottom at $210.84. This level was also noted in our article as an important support for BTC/USD. After the bounce near $210, we rallied over $20 dollars and we are currently quoted at $233 dollars per coin.
Peercoin Falls by 25 Percent
Peercoin fell by 25 percent since our update last week. During the bitcoin turmoil, a lot of $0.329 was reached at PPC prices. Same as with bitcoin, we later saw a strong reversal and Peercoin is currently quoted at $0.372. This is still 16 percent below the prices noted last Thursday.
The altcoin should remain under pressure, especially since now bitcoin has joined in the downtrend as well. Today’s swing reversal low at $0.329 may act as weak support but stronger support can be found slightly lower at the 30 cents mark. On the upside, weak resistance can be found at $0.376 followed by $0.431. A decisive break above the round 50 cents figure would end the current downtrend.
Namecoin Down by 30 Percent
Namecoin was also down substantially, by around 30 percent at one point today. Last week we left off NMC/USD struggling to break $0.50. Since then a low of $0.366 was hit. The subsequent reversal saw NMC trade back up to 43 cents per coin.
The sellers will remain in charge of NMC/USD. To end the current downtrend, we will need to see a breakout above the $0.567 swing high. On the lower end, today’s swing low at $0.366 fits nicely into a line of previous levels ($0.36 and $0.371). Both 36 cents and 37.1 cents are previous swing highs for Namecoin. With prices now on the decline, these levels should support prices, as of today’s bounce right at the level shows. However, a decisive break below $0.36 could exacerbate the losses.