One of the most alluring aspects of Bitcoin to traders and speculators is back: Volatility.
Price swings by the largest cryptocurrency have reached the highest level in about a year in the past few weeks as the digital asset trades around US$12,000. Bitcoin crashed almost US$500 in a matter of minutes this morning after reaching that level, only to begin testing that high again.
Bitcoin’s surge presents a bullish development on a technical basis, with its 14-day Relative Strength Index above 70. Assets are considered overbought if the RSI exceeds that level.
“It looks like it wants to test its 2019 highs of US$13,800 before it sees a meaningful correction to work off this overbought condition,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Other analysts have set their sights even higher, eyeing Bitcoin’s all-time high of about US$20,000 in late 2017 as the main milestone to beat.
“The level of US$10,000 has represented a strong psychological barrier for Bitcoin for the last few years. Now that barrier is broken and there are no major levels of resistance on the graph until the all- time high at $20,000,” said Mati Greenspan, founder of Quantum Economics.