Bitcoin surpasses $12 000 then tumbles in wild weekend action

Cryptocurrency tumbles after reaching the highest level in almost a year.
Image: Bloomberg

Bitcoin reminded investors of both its promise and peril in trading this weekend.

The world’s largest cryptocurrency rose to $12,112 in trading just after midnight New York time Sunday, its first foray above $12 000 since August 2019, according to pricing compiled by Bloomberg. But it plunged shortly thereafter — 30 minutes after the high, it had dropped to $10,638. It was up 0.6% to $11,159 as of 12:15 a.m. Monday.

“Clearing resistance at $10 000-$10 500, which coincided with the downtrend line from the late 2017 highs and first-quarter 2020 highs, established a higher high for Bitcoin confirming a new tactical uptrend,” according toRob Sluymer, technical strategist at Fundstrat Global Advisors.

“In the short-term Bitcoin’s daily momentum indicators are overbought (as they are for gold), but beyond some very near-term choppy trading, Bitcoin is likely to continue to trend to its next resistance level at $13 800.”

Bitcoin has rallied strongly in recent days after rising above $10 000. It had fallen as low as $4 904 in mid-March around the height of coronavirus-fuelled market uncertainty, but by mid-May was back around $9 000.

While cryptocurrencies’ volatility continues to attract skeptics, JPMorgan Chase & Co in June noted that Bitcoin’s rally back from the March depths suggests it has staying power.

The cryptocurrency’s notable moves both last weekend and this one recall a similar phenomenon in 2019, when outsized gains took place numerous times during Saturday and Sunday trading as the price rose from a few thousand dollars into five-digit range.

Other cryptocurrencies rallied as well. The Bloomberg Galaxy Crypto Index gained 6% to $532.64. Ether rose 2.3% to $381.95, capping a torrid rally that has seen it advance in 13 of the last 14 sessions in data compiled by Bloomberg.

© 2020 Bloomberg

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