Bitcoin volatility surges amid flirtation with $12 000 threshold

Price swings by the largest cryptocurrency have reached the highest level in about a year.
Image: Shutterstock

One of the most alluring aspects of Bitcoin to traders and speculators is back: Volatility.

Price swings by the largest cryptocurrency have reached the highest level in about a year in the past few weeks as the digital asset trades around $12 000. Bitcoin crashed almost $500 in a matter of minutes this morning after reaching that level, only to begin testing that high again.

Bitcoin’s surge presents a bullish development on a technical basis, with its 14-day Relative Strength Index above 70. Assets are considered overbought if the RSI exceeds that level.

“It looks like it wants to test its 2019 highs of $13,800 before it sees a meaningful correction to work off this overbought condition,” said Matt Maley, chief market strategist at Miller Tabak + Co.

Other analysts have set their sights even higher, eyeing Bitcoin’s all-time high of about $20 000 in late 2017 as the main milestone to beat.

“The level of $10 000 has represented a strong psychological barrier for Bitcoin for the last few years. Now that barrier is broken and there are no major levels of resistance on the graph until the all- time high at $20,000,” said Mati Greenspan, founder of Quantum Economics.

© 2020 Bloomberg

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