It has been an exciting two days for cryptocurrencies. Bitcoin broke out of its 11 day range, Peercoin prices doubled and Namecoin had a sympathy rally of around 30 percent. But let’s start from with big brother Bitcoin. As suggested in our article two days ago, the constant pushing on $460 eventually lead to a break lower. The support at $450 held up for few hours but during the evening yesterday prices broke lower and traded down to a new multiday low of $434.17. From here, BTC/USD had a sharp rally of 15 dollars. One coin is currently selling for $447.
Given the strength of the recovery, we think that the selling pressure may subside, at least in the next day or two. If BTC manages to climb back above the range support at $460, this may put an end to further losses. But unless the cryptocurrency can take out the important resistance at $500, gains will be limited. Overall the technical picture is still negative but the recent strong bounce may stall further losses.
Peercoin Doubles in Value, Hits $1.70
Since our last update two days ago, alternative cryptocurrency Peercoin doubled in value. The move up started around 80 cents per coin on Tuesday as prices rallied almost 50% to hit a daily high of $1.17. The bull run continued on late Wednesday into Thursday that saw a parabolic move carry PPC/USD from $1.02 to a new high of $1.70.
The reason behind the fantastic gains is an announcement by Peershares developer Jordan Lee. Peershares is a project based on the Peercoin protocol. On the Peercoin form, Lee posted that his team will unveil a new project called NuBits on 23rd of September. No other details were provided except his hint:
‘’Our solution completely solves the volatility problem cryptocurrencies have experienced. It does so with zero counterparty risk using a decentralized network. Much of the network revenue will be delivered to shareholders in the form of Peercoins. The network is an exciting advance I am pleased to have the opportunity to unveil.’’
Judging by this short snippet, this looks to be a sophisticated attempt to create a price fixing scheme. We will have to wait until the 23rd of September to get more details but if this is indeed an attempt to limit the recent PPC losses, we think that it will ultimately prove to be an exercise in futility. However, market participants seem to love the idea so far and I would (almost) never advise going against the market.