Bitcoin, the world’s most popular crypto currency has certainly taken investors for a ride since the start of the year, falling from around $15,000 since the beginning of January to $6,000 in the space of 6 weeks only to bounce back above the $10,000 dollar mark in today’s trading.
This certainly is the volatility a trader dreams of, with opportunities abound in long or short positions, so the question in which direction will it travel now?
It seems at the moment analysts are pretty divided about where Bitcoin will end up in the nearest future, but one thing is for sure, with such volatility and especially the sudden drop in price of around $9,000, one has to be quietly cautious about placing any positions.
Craig Erlam, a senior market analyst at Oanda notes that investors indeed should be wary because the chances of another sharp decline definitely remain.
Bitcoin continues to be a volatile as ever, having almost double in price in two weeks since bottoming around $6,000 on 6 February.
It now finds itself testing $10,000 from above, a level that is providing some support in the near term. Sentiment remains extremely fragile in cryptocurrencies and I’m not convinced it’s yet recovered from what was a nasty selloff around the turn of the year.
Some say that the current level of $10,000 may be here to stay in the short term as investors who got in within the last few weeks exit their trades and book in profits but that will eventually end and a new wave of long positions will see Bitcoin move significantly higher.
Trevor Gerszt, from Coin IRA, said:
$10,000 is a plateau for Bitcoin only as long as profit-taking continues, says
Investors who bought the dip nearly doubled their money when Bitcoin got close to $12,000, so a little bit of retrenchment was not unexpected. Once that’s over, we expect Bitcoin to continue its long-term price appreciation.