Bitcoin Retesting the October Highs

Bitcoin is in the process of retesting the October 17th highs, at least on some of the USD exchanges. On BTC-E prices topped out at $269.76 today, only $3 dollars below the $272.96 high. In the next three hours bitcoin fell to $265.00 but now we’re moving back up again. One coin is selling for $267.16 at the moment.


On OKCoin’s USD exchange we rallied to a high of $272.71 today, $6 dollars below the $278.79 high reached on October 17th. Futures rallied as well, albeit at a small clip. The nearer October 23th contract spiked to $276.78 today, $10 dollars below the $286.87 high. This futures contract is currently quoted at $274.49 dollars.

The reason futures haven’t come back as strongly is because Chinese bitcoin exchanges are trading weaker. The gap between USD and CNY sites is currently at $6 dollars, with most BTC/USD sites quoting prices around $270 dollars while most BTC/CNY exchanges are trading at 1,557 Yuan, or $276 dollars. You can find a quick snapshot of the major bitcoin exchanges HERE.

Just three days ago this premium was at a fantastic $10 dollars in favor of the Chinese exchanges. After regular financial markets opened on Sunday the USD/CNY exchange rate stayed pretty much the same, with the Yuan gaining slightly on the US Dollar. This probably quelled some of the anti-CNY speculation.

As we’ve previously noted, the price settlement for most futures contracts is derived by a mix of the major USD and CNY sites. Chinese exchanges contribute 50% of the weighting and when they trade higher, the usually pull up futures prices as well.

The important levels remain the same. To end the current rally, we will need to see a break below $240 on BTC-E and $243 on OKCoin. On the other side of the coin a decisive breakout above the October 17th highs at $272.96 (BTC-E) and $278.79 (OKCoin) would reignite the lost momentum higher. Note that the OKCoin levels above are for the USD spot exchange, not futures.

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