Easy come, easy go for Bitcoin
Mainstream media is filled with Bitcoin coverage to start the new year, following the surge over the Christmas and New Year’s holidays to a record near $35,000.
In European trading today, we are seeing a strong pullback with a plunge from around just above $33,000 to a low of near $28,000 in the past hour.
The drop now sees Bitcoin testing its 200-hour moving average. From a technical perspective, keep below that and sellers seize near-term control but hold above and the bias remains more neutral as the near-term battle ensues.
I would argue there’s not much use in trying to reason with the moves as it is part of the nature in trading/investing in cryptocurrencies. But as mentioned before, the more we see the hype and euphoria build, that’s early signs of things getting a bit “iffy”.
I would argue that the scope for a deeper pullback remains in Bitcoin as we look to start the new year but amid the idea of investors looking to keep some portion of cash invested in the asset, it does create some scope for speculative gains further out in the year.