Bitcoin is doing extremely well at press time, but many analysts are warning traders not to get too comfy just yet.
We Need to Keep an Eye On Bitcoin
As we all know perfectly well by now, bitcoin has proven to be one of the world’s most volatile assets. It can spike to unprecedented levels just as quickly and easily as it can drop. We’re witnessing this behavior all over again as of late. The currency – after falling into the high $3,000 range just under two months ago – is now trading at $9,500, the highest it’s been since late February. That means that in a relatively short period, the currency has added nearly $6,000 to its price.
This is good news, but it’s also a little scary. It means that bitcoin’s price behavior can be relatively unpredictable, and traders shouldn’t take this recent bull run as evidence of bitcoin’s endless resolve or strength. The time has not come to let our guard down; we need to stay vigilant and alert. At least that’s what some analysts are saying…
Joe DiPasquale – the CEO of crypto hedge fund manager Bit Bull Capital – says that where bitcoin stands right now is relatively shaky. As solid as $9.5K looks and sounds, this is a heavy resistance point for the currency, and granted bitcoin can’t or doesn’t move beyond this number soon, we can expect to see bitcoin potentially enter red territory all over again.
While he’s confident that the hoopla surrounding the upcoming bitcoin halving – currently set for May 12 – will potentially push the asset further, he’s not ruling out any bearish possibilities in the coming weeks. He comments:
The $9,500 resistance still stands in that the daily candle is yet to close above it, and there is an obvious struggle at that price level. However, the halving has a lot of media and marketing hype behind it, which naturally pushes the price higher as the event comes closer. With so much hype around the halving, the price can go much higher near the event, but we can expect pullbacks at each resistance level, with the next expected around $9,800. On the downside, a post-halving decline towards $8,000 cannot be ruled out.
We Shouldn’t Get Too Calm
Denis Vinokourov – head of research for London’s Bequant, a digital asset firm – offers similar sentiment, saying that while bitcoin is exploding at press time, it’s not quite out of the woods yet. He states:
The break of previous key resistance level was accompanied by a relatively modest follow through. In other words, the move higher tripped only a handful of stops which suggests that the bears are just as cautious about betting on the downside as the bullish camp going all out into the key risk event.
The highly anticipated bitcoin halving will occur approximately four days from now.