A Guide to Bitcoin Price Actions
Scroll DownBitcoin has long demonstrated a pattern of hitting local tops when market-anticipated events wind up happening. A recent launch of a Bitcoin EFT on 10/19 maintained this pattern, driving a rally to new records of over $66,000.
The price has since come back under $60,000, leaving investors wondering if the 10-percent correction signified the conclusion of a bull run or just some healthy profit-gathering in the short term.
As of the time of writing, Bitcoin had 12 years of price actions that people could analyze. It would seem that as much as bullish events can be anticipated, so, too, can bearish ones.
For an example, go back to April of 2014. Two of the largest exchanges in China announced that particular domestic banks were going to be closed in just a week. These were rumors that had been circulating for a month or more. This ban in China resulted in a five-month low in the price of Bitcoin at the time.
Other events were also anticipated, including the December 2017 launch of CBOE Bitcoin futures before the well-known all-time daily high of $20,000. Also, the Nasdaq Coinbase IPO correlated with the price of Bitcoin hitting $64,900.
Savvy investors analyze previous market data and patterns looking for events that they can anticipate, because they can usually predict how the Bitcoin market will respond to such events. When they have some idea what the future may hold at particular points, they can then leverage their positions to best benefit from expected highs and lows in the market.
The recent rise in the market was highly anticipated and happened as most people expected. However, the subsequent drop of 10 percent also made some investors very nervous. Does this indicate volatility in the market? Are they overexposed?
A double-digit correction is something to take seriously, at least in a statistical sense. However, considering the high the market had hit right before hand, the correction didn't indicate a bubble being burst or a looming nosedive. Even after this correction, Bitcoin values are still very high, historically speaking, and the market fundamentals remain sound for many investors.
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