There are quite some ‘bitcoin detractors’ out there, who often denounce the digital asset for its volatility. With another pump today there is no doubt that BTC has been as volatile as ever over the past few weeks but is it such a bad thing?
Bitcoin Price Back To $13000
Yet again bitcoin price has surged during Asian trading, breaking $13,000 a couple of hours ago. Many expected a prolonged correction down below $10,000 but that simply has not materialized. The move takes BTC above resistance on the last two-day candle closes when it first topped $13,000 late last month so a move higher is likely.
The intraday low over the past 24 hours has been just over $12,000, so it has been another thousand dollar day for BTC. Mainstream media outlet CNN has been asking the big question as to what is driving this volatility at the moment. From the swing low to high over the past few weeks has been over $4,000, the total cost of a bitcoin less than four months ago.
According to the chief market analyst with ThinkMarkets FX, Naeem Aslam, the move above $10000 last month sent a strong signal to average retail investors that BTC was back. Lennon Sweeting, director of institutional trading with Coinsquare Capital Markets, said that the rapid swing north spurred larger investors to cash in causing the sharp pullback, adding:
“There are some key players who hold a lot of bitcoin and can rattle the market,”
The report goes on to cite Facebook’s foray into crypto as one possible fundamental factor contributing to its recent rise. Aslam added that he wouldn’t be surprised if Amazon didn’t get on the crypto bandwagon soon with its own offering. While Libra is the complete opposite of bitcoin, it will help to raise awareness for the masses about digital assets and how to use them.
$50,000 BTC In Next Few Years
Aslam remains bullish on bitcoin calling for a top of $20,000 soon and a push to $50,000 over the next few years. His rationale is institutional investors adding bitcoin to their portfolios and it appears that this could already be starting adding that it is only a matter of time before the SEC approves a bitcoin ETF opening the floodgates.
Volatility is what attracts many to trade BTC. As BitMEX CEO Arthur Hayes said at the recent Taipei blockchain event ‘if you want to avoid the volatility you should trade the S&P 500’.
As BTC cranks higher the volatility is likely to increase as the difference in prices between swings magnifies. It is all good news for traders seeking some high octane action.
Is bitcoin volatility a necessary evil? Add your thoughts below.
Image via Shutterstock
