After an extended period of no volatility, (Bitcoin) finally broke out from its narrow trading range on Friday and slipped to sub-$600 levels. It is currently consolidating in the vicinity of $590-$600 with it’s current value at $597. The first half of last week was marked by calm and range-bound trading sessions with the digital currency comfortably placed above $615.
However, the second half of the week did not to follow suit much to the delight of the many investors encamped on the sidelines. As soon as the news hit the street that renowned Bitcoin investor Barry Silbert resigned from the post of CEO of SecondMarket, panic spread and triggered a correction of approximately 4%. The news quickly dented the bullish optimism surrounding the digital currency, and it's now struggling to sustain above the key psychological and technical support level of $600.
The correction has easily pierced through $600 and hence, it becomes even more imperative that stop-losses be followed strictly. Traders can go short in this counter if the currency slips below $590 (intraday) for a target of $570 with a closing basis stop-loss placed just above $600. Long positions should be avoided at this stage and should be considered only after a significant trend reversal is observed.
In other developments that the made news last week, the issue of Bitcoin price and volume manipulation on the Chinese exchanges has again cropped up with a user accusing OKCoin of influencing volumes after an abrupt decline was observed—albeit on huge volume—in the Bitcoin statistics in a 12-day period. It must be noted that the Chinese exchanges, including OKCoin, have repeatedly been accused of price and volume manipulation by using “trading bots”, so the news didn’t have any major effect upon price movement. A further setback to the crypto-revolution was the news that the National Assembly of Ecuador has banned Bitcoin and other digital currencies while announcing the creation of a new, state-run currency.