Bitcoin Hits New September Lows, Namecoin Hovers Above Parity

FXOpen

Bitcoin hit new lows for the month of September yesterday. Prices traded to a daily low of $361.12 before rebounding somewhat. Everyone’s favorite virtual currency is now on a six day losing streak, matching the negative streak that ended just 10 days ago on September 20th. Buying one bitcoin will currently set you back only $372 dollars, a far cry from the $726 dollars on January 1st of this year.

BTCUSDDaily

 

What’s Behind the Bitcoin Selloff?

There have been two main theories about the selloff in BTC prices this year.

1. The first theory is a simple story of supply and demand. Bitcoins are created by a process called mining. Mining produces a constant supply of bitcoins, around 25 BTC every 10 minutes. This comes to 3600 bitcoins per day, around $1.34 million at a price of $372. In the past year there has been a constant ”arms race” in bitcoin mining. This drove the profits in the industry down to near electricity costs thus now bitcoin miners are ”forced” to sell their newly mined BTC right away to cover their power bills.

2. This year saw a massive influx of new merchants accepting bitcoin. The process that started with major US retailer Overstock last year continued with TV network DISH and Dell Computers. Major non-profits like Wikipedia and United Way started to accept BTC donations. All of this opened new avenues to spend your bitcoins but there has been no corresponding jump in consumer interest.

In addition, increasing regulation around the world made it harder, not easier, to buy bitcoins. Earlier this year China effectively shutout bitcoin exchanges from its financial system. In the States, the New York Department of Financial Services plans to impose a new regulatory structure for cryptocurrencies. And in Europe, the European Banking Authority warned banks to stay out of bitcoin until new rules to govern the sector are drawn up.

Namecoin Hovers Above Parity

Namecoin prices have been moving in quite a large range of 20% for the past 10 days. The high of this congestion area can be pinned at $1.20 and the low is at the $1 parity level. Prices are currently trading just above this figure at $1.056. A breakout above $1.20 or below $1 may lead to prolonged gains/losses in the cryptocurrency. But keep in mind that trading near these figures is messy. Few days ago prices got as high as $1.215 before going down back below $1.20. Similarly on September 25th NMC/USD sold off to a low of $0.985 before rebounding above parity. Think of these levels as areas, not as strict breakout points.

NMCUSDH4

 

 

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

Indices

Although UK-100 Index Is Near All-time Highs, UK Economy Slips into Recession

Technically, a national economic recession is defined as two consecutive quarters of contraction, and yesterday's Office for National Statistics data confirmed that this has happened — UK GDP fell in the third and fourth quarters of 2023 by 0.1% and

Cryptocurrencies

DOGE Price Increases by 170% in Less Than 2 Months

On February 1, 2024, the DOGE/USD rate was = 0.0783. On the last Friday of March, it rose to 0.2150. The rising price means Dogecoin is now the eighth-largest cryptocurrency in the world by market capitalization, overtaking Cardano

Commodities

Market Analysis: Gold Price and Crude Oil Price Gain Bullish Momentum

Gold price started a steady increase above the $2,200 resistance level. Crude oil prices are gaining bullish momentum and might rise toward $85.00.

Important Takeaways for Gold and Oil Prices Analysis Today

· Gold price started a decent increase

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.