Bitcoin News: Projecting Next Price Rise For Bitcoins

The past weekend rounded up the recent trend of brutally high-volume selling on Chinese bitcoin exchanges. On 28th September, bitcoin dropped to a new five-month low of $372.35. The previous record low for Coindesk’s Bitcoin Price Index (BPI), is the six-month bottom reached on 10th April at $360.84.

Meanwhile, trading volumes touched historical highs for the third consecutive week, with 73.8% of bitcoins traded over Chinese exchanges OKCoin, Huobi and BTC China on the weekend. One possibility put forward was the principle of asset allocation – effectively, people are finding other places to put their money as the bitcoin price continues its long slide.

Other hypotheses have ranged from Citigroup’s proposal that merchants selling into the market upon accepting bitcoin as payment forced down valuations, to the even more unlikely explanation by the Wall Street Journal last week that Chinese citizens may be converting RMB to USD via offshore bitcoin trades.

In practice, there is nowhere near enough merchant trade to contribute to such a huge increase in volumes, while converting out of RMB in the way that the WSJ reporters speculated would be impossible without Beijing officials noting the yawning gap in underlying yuan outflows on bitcoin exchanges, especially given how closely such activities are monitored on the mainland already.

News on Bitcoins

The reasons behind the selling lie in the glaring conflict of a situation in which there is steady value erosion accompanied by what appears to be progressively increased trading volumes.

As bitcoin has tumbled lately, volumes have made new daily highs, with over 140,000 BTC being traded per day in the last few weeks for US$55m–$60m, according to data provided by That is twice the $30m daily volume high reached before the summer.

While illegal in many regulated markets, price support is not prohibited in bitcoin’s case since the asset is widely unregulated. If carried out for only short spaces of time the practice can be cathartic in that it introduces needed liquidity to exchange floors.

Bitcoin Financial News

In terms of the short-term scenario, data on trading prices when taken together with volume shifts, helps to uncover the true picture. In the six-month period from 1st April 2013 to 1st November 2013, the average purchase price of bitcoin was $111.56 across the four exchanges participating in CoinDesk’s BPI.

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