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Break-out or Fake-out?
Bitcoin gains 12% in less than 4 hours
Crypto markets have long been erratic and much more volatile than traditional markets such as stocks or forex. Bitcoin has been well known for its epic gains and dramatic drops. In November 2011, Bitcoin dropped from $32 to just $2, a 94% drop. In December 2017 Bitcoin rose by 1,950%, from just below $1000 to $20,000. It seems that my previous prediction may have been incorrect. No era is truly a stable era for something as complex and global as Bitcoin.
What's Going On?
Bitcoin has had an unexpected leap in price during
the past 24 hours. It shot up 12.42% in the span of 3 hours. The price peaked
at $5082 as per Bitfinex, later dipping
to $4747 where it is trading currently.
It appears that the Japanese candle sticks appear outside of the Bollinger Bands with the moving average dipping slightly. While it is most likely a good thing that Bitcoin broke the $5000 resistance point, it appears that the rally may not have sufficient support to maintain this price level right now. It would seem likely that a crash back to $4200 could be more than likely.
What About Long Term?
Long term predictions are notoriously difficult to get right. While this rally may lose steam in the near future, Bitcoin did break a very important price resistance point at $5000. It is completely within the realm of possibility that we will see Bitcoin trading at $5000-$6000 by this summer.
**The author owns less than $500 USD equivalent in various cryptocurrencies at the time of writing this article