Bitcoin Reverses After Amazon Denies Acceptance

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  • Amazon yesterday denied that it plans to accept Bitcoin, causing the price to drop after a six-day run
  • Bitcoin had rallied from $29,000 to $40,600 in the past week, effectively on multiple short squeezes
  • Bitcoin remains in the same two-month old channel

Bitcoin retraced over $4,000 yesterday after Amazon denied reports that it was considering accepting the cryptocurrency by the end of the year. Bitcoin had been enjoying a stellar week having bounced from $29,000 to $40,600 over six days, but the rebuttal of the news by Amazon, which had seemed to have prompted the final 10% spurt yesterday morning, ensured it remains in the range in which it has been camped since May.

City A.M. “Insider” Report Rubbished

Bitcoin had already been enjoying liquidating short sellers on the way up from $29,000 to $35,000, but the report in UK business paper City A.M that cited an “insider” as saying that Amazon was on course to accept Bitcoin by the end of the year gave it extra fuel and boosted it up to $40,600.

Other coins also joined the party, although not many kept parity with Bitcoin; ETH was one of the few to match its performance, hitting $2,435. By the end of yesterday however that joy had turned to pain, as late buyers found themselves underwater following Amazon’s denial of the story to Reuters.

Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true.

This denial is hardly surprising given the vague sources for the report, and the timing of the rejection, as well as the narrative involved, was too coincidental for some:

Bitcoin Hovering in Key Zone

The rejection leaves Bitcoin in a somewhat precarious position. If it can remain above the resistance line into which it on the retrace then we can hope that the drop can act as a higher low which gives it a great chance of breaking above the $41,500 boss level:

If it closes beneath this line however then it looks likely that Bitcoin will once again be testing the $30,000 mark. Either way, it still shows that Bitcoin is able to move on positive news, no matter how short lived, so there is clearly still life in the old dog yet.