It is hard to believe bitcoin’s all-time high came all the way back now on December 2nd, 2013 when the digital asset hit $1175 per Bitfinex exchange data. This sounds nice if you sold at the high but the currency also opened that day at $998 and its low was recorded at $538! Times have changed in these few short years and daily price swings haven’t been on as much of a shocking rollercoaster ride, which is a good thing overall for the long-term viability of the digital currency.
The elevated volatility was one of the impediments of the bitcoin economy adopting as a form of payment faster. Although things are still obviously volatile and can change at a moment’s notice (which is true for any market), back then doing fiat to cryptocurrency and vice versa swaps was risky as it was difficult to know what your bitcoins would be nominally worth the next day let alone a few hours from receiving them.
Which bring us to now, as of today the BTC/USD price is hovering on the $1100ish handle, having been on a rejuvenated trajectory upwards since October 2016. Global politics, China’s currency policies, and India… just to name a few, are reasons cited for the outperformance of the cryptocurrency sector during this time period.
In 2016, BTC/USD started the year off at $428 and rose in price for the first half of the year where it peaked at $790 on June 13th before correcting. That is six months without a major dip, however, the price began to retrace and dips could be found all the way down to $570 til October 3rd, before this current massive runup. The question is, are we due for a correction in the bitcoin price or will we shoot towards the all-time high of $1175 first?
The first resistance will come in at the $1100ish handle (which was hit earlier today), but if bitcoin seems ready to take this out, then we will most likely see a test of the 2013 high of $1175 sometime in Q1 2017. As such, if the price trends towards the $1175-$1200 region, we are likely to see a new trading range in BTC/USD between $1000 and $1200. However, the last run-up in price provided six months without any major corrections, and if the current bull run which started in October 2016 lasts as long, then we won’t see any major pullbacks until April 2017, and who knows where the price could be by then.
The current bullish fervor is not without its roadblocks. For one, central banks seem ready to normalize interest rate policies and we don’t know how commodities including crypto will react to this development. In addition, there is always headline risk surrounding cryptocurrency exchanges, hacking, and security concerns still working to be overcome by the sector. Regardless, the market has seen an impressive bid on bitcoin to start the year continue on, so will we hit $1200 or pullback to $1000 first?
It’s also worth noting that today on Chinese exchanges the bitcoin price has hit new all-time highs at ¥8000. Indeed, that’s the new all-time high in terms of the renminbi.
Keep up with CryptoNinjas for more daily fundamental and technical analysis of the cryptocurrency sector, full of trading insights, ideas, and commentary from professional traders and market makers.