A Closer Look at Bitcoin
At less than $10, no one ever thought it would get to $100, $1,000, even $10,000.
But in early December 2017, the price of a single Bitcoin was up to $17,798 with its sights set on $20,000. At the time, after a dip to around $14,000, buyers reemerged, buying on a dip marked by a long legged doji cross.
While there were signs of over-extension on the Bollinger Bands (2,20), relative strength (RSI), and with Williams’ %R, each time it tested its 10-day moving average it had a tendency to move higher. There were also signs of a bull flag breakout, which many argued could lead to $20,000 Bitcoin.
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On the downside, there appeared to be very strong support at $14,500 at the time.
To market veterans, such a sustained move has been called “nuts,” a speculative mania that could result in a massive and quick sell off. However, despite such pessimism, many are still buying, hoping for higher highs.
Still, it was tough to argue for sustainability in December, especially with such massive price moves. It took 23 days for the crypto currency to run from $2,000 to $3,000. It took eight days for it to run from $5,000 to $6,000.
It took two days for it to run from $9,000 to $10,000. A day later, it was at $11,000. Six days later, it stood at $12,000. Seventeen hours later, it was at $13,000.
Then, in less than 24 hours later, it was up to $19,000.
That was all generated by the madness of herd mentality.
The idea that folks could miss a potential run higher is fueling higher highs. Not even a warning from the U.S. SEC of “correspondingly greater opportunities for fraud and manipulation” seem to be able to slow the quickened pace of upside.
In fact, they note:
"We have issued investor alerts, bulletins and statements on initial coin offerings and crypto currency-related investments, including with respect to the marketing of certain offerings and investments by celebrities and others," SEC chairman Jay Clayton said. "If you choose to invest in these products, please ask questions and demand clear answers. "Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds."
However, when not even a warning such as that can slow down the rally, we know the madness of herd mentality has taken the steering wheel.
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