If you’re the type of trader that gets an adrenaline rush from additional market volatility, then you’re probably digging those huge bitcoin price swings these days. Got no clue what I’m talking about? Take a look at this BTC/USD chart:
As I’ve covered in my previous bitcoin updates, price has been cruising mostly sideways during the earlier part of 2015, getting a bit of a boost from the Greek debt crisis mid-year and from speculative positioning among Chinese traders this month. The cryptocurrency then surged all the way up to the $500 area before making a sudden turnaround on profit-taking and renewed U.S. dollar strength.
According to some market analysts, the recent rally was quickly faded because it was simply a result of a Russian Ponzi scheme, which led Chinese investors to flock to a fraudulent website and recruit more members with the lure of outsized profits. This pushed bitcoin to its sharpest climb in 18 months and trading volumes to all-time highs. Heck, bitcoin even managed to land in the Top 3 Commodity Products Traded at Plus500 in the past few days!
As the unwinding of positions ensued when the scam was discovered, bitcoin fell back to where it started for the year, threatening to end up in the negative territory if the selloff carries on.
This goes to highlight the cryptocurrency’s vulnerability to speculation and inherent volatility, making it difficult to accept as a mainstream medium of exchange. Imagine if you’ve held a considerable amount of bitcoin back in October and seeing its dollar value double in just a few days… only to drop right back down again in 24 hours!
Now this type of price action ain’t exactly my cup of tea, as I already find the forex market pretty exciting enough. If you thrive in volatility, though, then bitcoin might be worth watching until the end of the year as it might have a few more big moves left. BTC/USD is currently stalling at an area of interest around the broken resistance anyway, so there’s a chance that the climb could resume.
Where do you see bitcoin prices ending this year? Don’t be shy to share your thoughts in our comments section!