After circulating around the $2,600 mark for almost a week, the price of Bitcoin has set on a downward course that began last Sunday and is continuing throughout the middle of this week. But while price volatility is not a strange sight, current market signals suggest that a bigger trend might be forming, so keep your eyes on your Bitcoins.
Bitcoin’s price drop was also mirrored in its biggest contender, Ethereum, which lost around half of its USD value from a month ago. Yet, talking to CNBC, Bobby Lee, head of BTCC – one of the biggest Bitcoin exchanges in China, says that these price swings are “not a problem”. Namely, he says that the volatility is a normal for such fresh asset classes as there has been no price discovery thus far.
According to Lee, people usually trade assets like Bitcoin at lower levels, before the entire market understands the asset could have a higher worth and then the price goes up. His optimism is shared by Dave Chapman, of assets trading company Octagon Strategy, who believes that the market is currently at a “tipping point”, as more people are becoming open to the idea of owning cryptocurrencies.
Will the Price Drop Stop?
Coincidence or not, around the time the news of Mt.Gox’s CEO trial started spreading online Bitcoin began a gradual decline from the $2,600 levels it circled around during last week. The lowest point was hit today morning, when the price touched $2,237.80, while the highest point was on Sunday evening, when 1 Bitcoin was traded for $2,531.14.
Naturally, the market cap also took a hit as the price began to decline, ending up at the current $38.3 billion, while only a week ago it was around $41 billion. But what’s even more note-worthy is the trading volume, which almost tripled in size since Sunday and is now at a staggering $1.24 billion, showing a very increased interest in Bitcoin trading. As the volume is considerably high, you can expect faster price changes in any direction the market trends lead to.
Currently, our market analysis shows that the overall mood is pro-sell, with 10 out of 12 moving averages and 5 oscillators sending a selling signal, while 5 more are neutral. The SMA 100 has also dipped down below the SMA 200, hinting that the downward course is more likely. However, there is some small buying pressure showing on short-term charts, so all is not lost. But if the bearish trends continue, the price will likely drop further.
Head of Mt. Gox Pleads Not Guilty in Tokyo Court
Former Mt. Gox CEO Mark Karpeles faced embezzlement charges in a Tokyo District Court this Tuesday, where he pleaded not guilty, the BBC reports. The ex-head of the most notorious Bitcoin exchange was suspected to have gained access to the Mt. Gox computer system at the end of 2013 and transferred around $3 million dollars from the exchange’s account to a personal account.
If you remember from our previous updates, the Mt. Gox exchange collapsed in 2014 and took away millions worth of Bitcoins, triggering a wide-scale panic and price crashes in the following months and regulatory responses from the Japanese government. At the time, the exchange blamed hackers for the loss but Karpeles was subsequently arrested and released on bail in August 2015.
According to reports, during the Tuesday trial, Karpeles’ defenders denied the embezzlement accusations while he allegedly swore to God that he was innocent. If found guilty, Karpeles could be facing up to five years of prison time.