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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 a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And he was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael is also a Pulitzer Prize-nominated writer and reporter. His first book, "Overdrawn: The Bailout of American Savings" warned people about the coming financial collapse - years before "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.