Bitcoin is slowly drifting to the important $550 support. This area was tested on two separate occasions in June. The first time on June 14th prices traded as low as $546.33. A week later, BTC/USD gave it another shot but was again unable to go lower, reaching only a low of $556 the second time around. We are currently quoted at $558 per coin. If we get a break below $550 (preferably also below $540), or a daily close below this level, bitcoin losses will likely accelerate.
Below $550, the next significant level of support is the round psychological level at $500. On the higher end, unless prices manage to breakout back above the $600 figure, bitcoin will remain under pressure. Above $600, the next level of resistance stands at $633 per coin.
The Regulatory Noose is Tightening
On the fundamental side, the recent regulatory proposal by the New York Department of Financial Services is still having a negative impact on market sentiment. Because New York is the financial capital of the USA, bitcoin enthusiasts fear that if strict rules are adopted there, they may be copied by other US States leading to a regulatory nightmare scenario. On the other side of the pond, few weeks ago the European Banking Authority issued a warning to EU Banks to stay out of cryptocurrencies until new regulations are put in place. The next few months up to a year will be crucial on the regulatory front. If rule makers around the world decide to impose tough new regulations, growth in the crypto space may be stifled. This is definitely something that even traders should keep an eye on.
Peercoin Edges Closer to Parity
Peercoin is getting close to parity with the US Dollar. After few days of relative calm, PPC prices reached a new multi month low of $1.053 today. We are now trading just 5% away from the point where 1 Peercoin will equal 1 US Dollar. It has been a tough few months for PPC/USD as the pair has lost over 80% of its value, falling from over $5 per coin back in January. Almost half of those losses came after May of this year, when the Ripple fiasco shattered confidence in alternative cryptocurrencies. Unless big brother bitcoin gets out of its slump, Peercoin and other alts will likely continue to trade weaker.