When Bitcoin prices fell sharply last month, I explained why I'm still bullish about this extraordinary new investment vehicle.
Back in December, I noted that Bitcoin prices had recently fallen as low as $455. From there prices rallied quickly and stabilized, finding key support in the $550 range.
Not only did I reiterate my optimistic long-term support for this new digital currency, I said the market for investing in Bitcoin still looked great and that it isn't going away any time soon.
I also said:
Bitcoin's challenge to central banks and governments around the world means it will come under pressure from time to time.
This is exciting new technology that is sweeping the globe. But since the market is still in its very early stages, Bitcoin is likely to remain volatile for a while.
For that reason, I remind investors not to bet the farm on Bitcoin. You don't want to miss out on this tremendous opportunity but you should invest only what you can truly afford to lose.
Here, a few weeks later, I'm happy to tell you that Bitcoin prices have substantially recovered.
Indeed, they zoomed all the way to $1,044 on Mt. Gox, one of the world's leading exchanges, before settling back in the $920 range.
This new trading band is crucial for the health of the market. If you look at the attached chart, you'll see that Bitcoin prices are once again trading above the 50-day moving average, an important sign of bullish support.
Right now, it looks like $1,000 remains the key resistance point. The chart shows the price bouncing around that pivot point.
The Resilience of Bitcoin Prices Shows Why It's Here to Stay
As I see it, a $1,000 Bitcoin is a major psychological test of the market. And the reason is simple.
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.