When it comes to crypto, its Bitcoin that’s been hogging the headlines lately, as it has advanced from strength to strength ever since it bounced at $3000 when the CEO of JP Morgan tried to talk it down. It is hard to believe that was only two months ago, because as I type, Bitcoin is making new all-time high prices just a shade over $9000 per coin. That represents an advance of almost 200% in nine weeks! Yet there is every indication that this rise has further to run. Of course, Bitcoin has had several strong all-time breakout highs in recent weeks, but this week there is some added spice from the fact that Ethereum, the second-largest cryptocurrency by market capitalization, has also just made its first new all-time high since June, at $520 per coin yesterday. When its not just Bitcoin, but the two largest cryptocurrencies that are making new all-time highs almost simultaneously, this gives more weight to the sector’s movement.
It is natural to ask how much higher Bitcoin and Ethereum might go. The fact is that when it comes to all-time highs, nobody knows when they will run out of steam. The only anchoring possible is to watch carefully what the reaction is when a very large and therefore psychologically significant round number is reached. With Bitcoin, all the round thousands have importance, but the biggest number of all looms not much further ahead: $10,000 per coin. There is bound to be a lot of profit taking there, but don’t assume that means the level will hold. Watch the action carefully if $10,000 is reached: if there is a strong and dramatic bearish turn, that will probably signify the start of a deep retracement, if not a major trend change and possible long-term high rice. If the price powers past it, ideally after a brief pause, that will be a sign that the price will probably go on to reach $12,500 quite soon. Sooner or later, there will be a steep fall in price. Just don’t assume it’s necessarily going to happen sooner and not later.