The mid-July rally in bitcoin is showing signs of petering out. Since hitting a one-month high on July 24, bitcoin as surrendered more than 10%, taking the wind out of the sails of those who had their sights on $10,000 and beyond.
The momentum-killer came with the second rejection of a bitcoin-related exchange-traded-fund submitted by Tyler and Cameron Winklevoss. However, it would be a big mistake to write off the chances just yet, says one market analyst.
“Investors are highly underestimating that if bitcoin futures can trade on a major exchange, then an ETF can,” said Naeem Aslam, chief market analyst at Think Markets U.K. “It’s a huge blunder if they can’t see it coming.”
Read: These may be the 3 biggest hurdles to a bitcoin ETF
The price of a single bitcoin BTCUSD, -1.98% was last valued at $7,554.51, down 1.8% since Tuesday 5 p.m. Eastern Time on the Kraken exchange.
Read: A total collapse in bitcoin is a real possibility, says Nobel Prize–winning economist Krugman
Moment of truth for bitcoin after yet another failure at its 200-day MA
As it did in May, the 200-day moving average, a closely watched long-term momentum indicator, is providing formidable resistance for the No. 1 digital currency. As Rob Sluymer, technical strategist at Fundstrat Global Advisors notes, the level coincides with another popular technical indicator. “In the very short-term BTC, is likely at a pullback/pause point at resistance level coinciding with a 61.8% retracement of the May-June downtrend just below the May 20 highs and near the declining 200-dma,” he said.
After yet another failure at the key indicator, Sluymer said bitcoin is facing a “moment of truth” as it trades near support at $7,400.
The last time bitcoin failed at its 200-day moving average it dropped more than 40% in seven weeks.
Ripple outperforming other altcoins
Ripple is the only major altcoin, smaller coins other than bitcoin, showing gains Wednesday, with a single XRP coin XRPUSD, +3.27% trading 3.2% higher at 45 cents.
Elsewhere, Ether ETHUSD, -3.30% was down 2.9% at $419.96, Bitcoin Cash BCHUSD, -2.37% is trading down by 1.9%, at $754.80 and Litecoin LTCUSD, -0.75% is down 0.8% to $77.10.
Bitcoin futures are under pressure yet again. The CME Group Inc.’s August contract BTCQ8, -2.59% is down 2.3% at $7,555 and the comparable Cboe Global Markets Inc. contract XBTQ8, -2.27% is trading at $7,540, down 2.2%.
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