Cryptocurrencies fell across the board yesterday on renewed regulatory pressure in the States. Bitcoin blew past $337 and few hours later the cryptocurrency hit a low of $328.93. Both Peercoin and Namecoin followed big brother bitcoin lower. Peercoin broke below $0.823 per coin to hit $0.801 and NMC fell to a daily low of $0.861 yesterday.
Bitcoin Breaks Below $337
Bitcoin broke below the lower bound of its range at $337 and soon after hit a low of $328 per coin. Everyone’s favorite cryptocurrency then took back some of the lost ground and is currently trading at $335.20.
Naturally, the break below $337 is bearish for bitcoin. The $328-$330 swing low is still fresh and thus unlikely to present strong support to falling prices. The first important level to keep an eye on is the $300 round figure, followed closely by $285. A break of the important milestone at $266 may lead to a prolonged period of losses for BTC. Like we’ve mentioned a few times previously, this figure was the high for BTC/USD during most of last year and will likely present a strong challenge to the bears. On the top end, bitcoin will need to both break and stay above the $350 figure to sap the strength of the current downtrend.
Renewed Regulatory Pressure in the States
Bitcoin firms find themselves under renewed regulatory pressure in the States. Just as the New York Department of Financial Services closed down the comment period on its proposed regulatory framework, two other US agencies joined in the ring. First FinCEN (Financial Crimes Enforcement Network) issued two new administrative rulings regarding virtual currency. According to the rulings, both bitcoin exchanges as well as bitcoin payment processors will now be required to get a money transmitter license. While bitcoin exchanges were anticipated to fall under some type of regulatory oversight, the inclusion of payment processors in the mix was not expected.
As FinCEN was issuing the heavy-handed rulings, the US Securities and Exchange Commission was allegedly sending out ‘’hundreds of letters’’ to cryptocurrency businesses. The story (which first broke on Coinfire.fr but the link was later removed) claims that the Commission is targeting businesses that have used bitcoin or other cryptos to crowdfund their operation.
Namecoin and Peercoin Fell Short
While Peercoin followed the initial bitcoin move lower and prices broke past the lower bound of the range at $0.823, they failed short of $0.80. As I mentioned in my article two days ago ‘’if PPC/USD moves below $0.82 (or better yet below the $0.80 round figure), the next support can be found at the October 5th swing low at $0.736’’. While the move below $0.823 is certainly bearish, a clearing of $0.80 would be a better signal that the sellers are now fully in charge.
Similarly to Peercoin, NMC sold off as bitcoin declined. But unlike BTC and PPC, the lower bound of the Namecoin range near $0.864 remains unbroken. While prices briefly traded as low as $0.861 yesterday, NMC/USD was quick to rebound and is currently trading at $0.868 per coin. The first potential support if the lower bound at $0.86 gives way can be found at $0.783, followed by the NMC yearly low at $0.751. Please check out my Tuesday article to see more support/resistance levels for the above mentioned cryptocurrencies.