Wednesday, 30 May 2018 21:00

Bitcoin surrenders early gain as traders key in on support at $7,000

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Major cryptocurrencies flirted with important technical support levels on Wednesday after digital assets enjoyed a sharp rally in the prior session.

Bitcoin, the worlds biggest digital currency, remains above the psychologically important $7,000 level but has lost 2.6% compared with level Tuesday at 5 p.m. Eastern Time on the Kraken exchange, with a single BTCUSD, -2.15%[1] coin changing hands at $7,301.35.

After slumping toward $300 billion on Monday, the total value of all cryptocurrencies has rebounded, and was most recently at $320 billion, according to CoinMarketCap[2].

image CoinMarketCap
Cryptocurrency market cap

Read: Hospital launches rehab clinic to treat cryptocurrency addiction[3]

Are miners being squeezed?

As the overall price trend remains down, one crucial part of the bitcoin industry is changing, and it could have greater ramifications if prices continue to track lower.

“Historically, miners have been true believers and supporters of bitcoin and other cryptocurrencies—choosing to take profits in manageable chunks or holding off on selling coins to support prices,” wrote Thejas Nalval, portfolio director, and Kevin Lu, director of quantitative research, at Element Asset Management. “However, the world of mining has changed from one made up of evangelists to one where large-scale facilities reign, making fluctuations in price more deadly.”

The folks at Element estimate that break-even levels for mining bitcoin range from $6,000 to $8,600, meaning prices may be approaching levels where miners might have to sell holdings to sustain their operations.

According to a May report from Elite Fixtures, the cost to mine a single bitcoin in the U.S. is $4,758, $8,723 in Japan and $26,170 in South Korea.

Read: Here’s how much it costs to mine a single bitcoin in your country[4]

Ripple building momentum, CEO says

Speaking at the Code Conference, Brad Garlinghouse the chief executive of payment protocol Ripple, told CNBC that the company is now signing up one financial institution per week to move money across the globe, saying the growing numbers is having network effects. “The more participants the more value in joining so we are seeing that momentum build,” said Garlinghouse.

Cory Johnson, chief market strategist at Ripple verified the numbers to MarketWatch, saying “a year ago we were adding one financial institution every six weeks. Today it is one every six days.”

Ripple recently announced it has signed up the National Bank of Kuwait to adopt the xCurrent platform, which is used by financial institutions to make international payments.

Altcoins turn south

After Tuesday’s rally, altcoins, or digital currencies other than bitcoin, have given up some of the gains made over the last...

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