Following a quiet work week, the bitcoin market plummeted nearly 7% on Saturday following news that several Bitcoin firms would stop operating in New York due to the BitLicense. The price drop erased a month’s worth of gains for many traders who will look to identify new support levels and start the rebuilding process over the next week.
Bitcoin by the Numbers
Bitcoin Price Recap
The bitcoin market bounced between $275 and $285 during the workweek before plummeting nearly 7% on Saturday, touching a low of $260. The sudden price drop was influenced by news that several Bitcoin firms would be ceasing business operations in the state of New York due to BitLicense requirements.
Applications were due by the end of last week and this was reflected in the light volumes throughout the week as most traders waited held off on making positional bets until after the deadline. Week-over-week volume was down approximately 25% heading into the weekend. Volumes spiked with the drop in price and Saturday alone accounted for nearly 30% of last week’s volume.
Bitcoin Trading Week Ahead
Traders will look for the market to show signs of revised support this week as cash begins to hit major trading venues today. Near-term support was found at $260, but may not last as new BitLicense-related developments pose an ongoing threat to the market.
Should volumes continue to remain light, market stability will be hard to justify and prices could drop further. If prices take another 5-7% hit, this could lead to a significant sell-off triggered by traders looking to lock-in gains related to position placed earlier in the summer.
Best Bits from Last Week
- WSJ: 5 Things to Know About Bitcoin Exchange Mt. Gox and CEO Mark Karpelès
- IB Times: Bitcoin Deemed Regular Currency by Australian Senate Committee
- AB: Blockchain Holds Promise for Cross-Border Payments
- Coindesk: Bitcoin Exchanges Kraken and Bitfinex Cut Services in New York
Bobby Cho is the Director of Trading at itBit and leads our Global OTC Agency Trading Desk. Previously, Bobby was Vice President of Trading at SecondMarket where he helped create the first broker-dealer based institutional bitcoin trading desk. He has extensive experience in both bitcoin and securities trading with clientele ranging from Fortune 500 companies, hedge funds, asset managers and other financial institutions.
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*All data and references are current as of 9:00AM EST on 8/10/2015.