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November 20, 2017, 03:53:21 PM |
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Bitcoin prices are at their highest ever, but there may be a chink in the cryptocurrency's armor.
Just a week ago, the bitcoin-U.S. dollar (BTC/USD) exchange rate hit lows near $5,500. Then, by Friday, prices were flirting with fresh record highs around the $8,000 mark.
With bid tone remaining intact over the weekend, bitcoin rose to an all-time high of $8,101.91 around 20:00 UTC yesterday, as per CoinDesk's Bitcoin Price Index.
However, while the $2,500 rally is impressive, data from CoinMarketCap indicates the move higher from $7,853 (Nov. 17 open price) lacks substance, as trading volumes have steadily declined over the last three days.
A low volume rally is not necessarily an ominous sign, but could be an indication of overstretched valuations: i.e. investors are reluctant to invest fresh capital above $7,800 levels. Further, the Google search volumes have seen an anemic rise, perhaps validating that argument.
So, should we expect a corrective pullback?
The technical charts favor further upside in prices, but signal the potential for a pullback to $7,300 levels if prices break below $7,900 today.
As of writing, BTC is trading at $8,035 levels. As per CoinMarketCap, the cryptocurrency has added 3.4 percent in the last 24 hours.
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