After Bitcoin’s poor performance since its peak in 2017, crypto bulls are getting excited again after Bitcoin surged 75% from its December lows. In order to help determine if this bullish trend has legs, Bitcoin hopefuls should watch the $6,000 resistance level that is just overhead. That $6,000 resistance levels was an important support level for much of 2018 until Bitcoin sliced below it in November and promptly dropped nearly 50%. If Bitcoin can manage a convincing close above $6,000, further gains are likely. On the other hand, if Bitcoin bumps its head at $6,000, it may fall back down and re-test the lows of the past few months.
The weekly chart shows the significance of Bitcoin’s $6,000 level:
For now, I am waiting to see if Bitcoin can stage a decisive close above $6,000. I personally believe in having a small amount of Bitcoin as a diversifier and a hedge against a monetary crisis, but I’ve been skeptical of the high prices in the last two years. I’m not entirely convinced that the late-2017 bubble is fully unwound, but a solid breach above $6,000 would make me more confident.
Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube
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