Bitcoin market update 9/9/2014
Market is sliding lower since yesterday. On yesterday's bitcoin update, I thought that bitcoin would retest lower support line and bounce, which it did. However, even with the Paypal news, the bounce was short lived and now we are at the lows of the day.
Looking at bfxdata, BTC short swaps are at new high, this suggest that traders are comfortable shorting at these low prices, expecting lower. That is kind of a scary thought. A lot of discussion on the forum and reddit have been focused on how paypal will attract new buyers and faster adoption. While I agree with you that this is for the greater good for bitcoin, price don't always follow fundamentals. A simple explanation is that expectation is built into the price, bitcoin's price has already discounted some of the adoption by major processors, that is how its market cap became 10 billion. Judging by the price action of bitcoins after the news, traders and early adopters were disappointed with the news. You can read about another post yesterday covered the buy the rumor/sell the news topic.
I shorted LTC at 4.92 earlier on twitter, I do not know the exact reason why LTC is not tracking bitcoin. It should because crytocurrenies are correlated to a high degree (R > 0.7). Its a small position with a wide stop because volatility is crazy in crytoland.