What Happens After Bitcoin Tests $30,000?
Jani Ziedins | Dec 30, 2020 12:56AM ET
My last free Bitcoin post was two weeks ago and as expected, this cryptocurrency exploded higher:
I don’t expect this buying frenzy to cool off anytime soon. As I said a [month] ago, maybe the top is $25K, maybe it is $30K. Or maybe we keep going to $40K. Who knows. But when something moves this fast, the only choice we have is to grab ahold and see how far it goes.
As I’m writing this, Bitcoin is pushing toward $28K and there is a good chance it will have already crested this milestone by the time you read this. That is just how quickly this is moving.
As I wrote in early December, this breakout was inevitable:
These huge rebounds almost never touch the old highs [$19K] and then simply give up. Even if the bubble eventually bursts, we are going to smash through the old highs before that happens. Maybe the top is $25K or maybe it is $30K. Either way, this latest buying frenzy is far from over.
But that was then and this is now. Unfortunately, the easy money has already been made and things are going to get a lot more tricky.
Only the most greedy fools look at a 50% gain over two weeks and assume the next two weeks will be just as effortless. More experienced traders know the stall is coming and it will be here soon. Maybe we hit $30K and take a breather. Maybe we exceed the $30K barrier briefly before pulling back to $25K or even the lower $20K’s.
Two-steps forward, one-step back. Cognitively everyone knows that’s the way this game works, yet they always forget this simple concept in the heat of battle.
Ride this move higher but be ready to lock in your profits and get off this ride before the inevitable pullback. Even if you only take partial profits, that’s still a far more comfortable way to ride out the next dip. When everyone else is debating if they should abandon ship, you have cash ready to buy the next bounce.
Consider taking some profits proactively near $30K and then use a trailing stop to protect the rest. All good things come to an end and this breakout is no different.
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