Bitcoin Hovering Near 1-Week Low as Gold Price Takes a Pounding

Bitcoin prices continue to hover near one-week lows as the resumption of "normal life" in Greece has removed much of the impetus for traders to dive in.

Banks in the economically challenged country have finally reopened after a 3-week closure designed to prevent the financial system from collapsing. However, there are still limits on withdrawals and international wire transfers are not available.

Bitcoin (BTC/USD) hit a low of $274.50 on Bitstamp in what has been highly uneventful trade during the past 48 hours. But today's low has challenged that reached late last week, an indication that more of bitcoin's hard-earned gains may be at risk.

Bitcoin has been considered by some as a potential safe haven asset during monetary crises. Its limited supply endears it as a secure store of value, similar to gold for its investors. Price appreciation, especially that of bitcoin, is more driven by the secondary effect of trader speculation of investor flight to safety than the actual flight itself.

Gold, which failed to capitalize on the Greece crisis, tumbled by nearly 3% to $1,103/oz, a 5-year low. Much of the selling came out of China on abnormally high volumes, and prices have since recovered to $1,115.

The dollar strengthened against most commodities, and the euro fell to $1.0850 despite the apparent return to calm.

Litecoin is hovering near $3.70, and is now within 12% of falling back below its 50-day moving average, which is still rising.