Bitcoin tonight did what it has seemingly been threatening to do for a week – break above $60,000.
With an all-time-high of $58,332 set almost a month ago, Bitcoin (BTC) has been flirting with the possibility of surpassing it and breaching $60,000 on numerous occasions.
This evening, the flagship cryptocurrency did just that. More importantly, it did it with conviction.
Previous milestones have been crossed tentatively, with a frustrating ebb and flow as if it dared not to cross the line. Tonight, however, there was enough momentum to carry it beyond the $60k mark to set a new record of $61,701.
In the week leading up to this remarkable movement to the upside, BTC has found itself being repeatedly pushed back on a line of resistance firmly set on $57,000. Indeed, the robustness of the counteraction had seemed as if it might keep the 12-year-old digital asset chopping along a narrow bandwidth for some time.
However, a signal that a push towards $60k was beckoning came early on Friday when that resistance line at $57,000 became increasingly stretched with a series of tests towards $57,500.
A move for $60k had seemed almost inevitable until the bombshell news broke on Friday afternoon that the CFTC was shining its spotlight of suspicion on Binance.
The announcement sent shockwaves through the cryptocurrency markets, and the charts suddenly turned red across the board.
Out of the market
In the melee, Bitcoin dropped a wick beyond the depths of $55,000 and it appeared as if all momentum for an upward push had been kicked out of the market.
Within the hour, though, BTC had dusted itself down and began another build-up, climbing back above $57,000 before Friday closed.
A huge $1,500 lift on Saturday morning drove it above last month’s all-time-high before a series of green steps escalated over the $60,000 pinnacle that, only a year ago, had probably seemed like fantasy to many investors.
As ever, there is a ‘but’ when talking about the excitement of a bull market. And, in this case, there are two.
Firstly, volume. The importance of volume in cryptocurrency cannot be underestimated. It is the energy and the lifeblood of the market sentiment, and the barometer by which you can tell what it may do next. The volume carrying Bitcoin over $60,000 was minimal.
It should be remembered that, when BTC soared to last month’s remarkable high, it completely ran out of energy, became overheated, and flopped heavily. Twice.
Secondly, this is weekend trading. The Bitcoin market is a rollercoaster at the best of times. At weekends, it’s like a badly-serviced rollercoaster in a typhoon, and the price means little if it isn’t nurtured in the cold arms of Monday’s embrace.
The take here for traders is one of great caution. While there will be Champagne corks flying in every direction now on account of a record high, the euphoria will only continue if Monday’s market likes the look of it. If it doesn’t, the celebrations could rapidly turn into a frightful hangover.
It all depends on who wakes up first on Monday – the bear, or the bull.