After years of controversial hype about Bitcoin one day reaching 100K, that big day finally came. The digital currency–tethered to absolutely nothing–has hit six figures and the entire world is asking what will happen next. Let’s look beyond the news, out of the box, and see if there’s a deeper insight we can take advantage of.
In an interview with CNBC back in December 2021, former MicroStrategy CEO Michael Saylor predicted 100K, “if BTC market capitalization matches that of gold." And he’s not alone in the lofty prediction. Robert Kiyosaki, the author of "Rich Dad Poor Dad" forecasted that Bitcoin's value could hit $500,000 by 2025, citing insights from artificial intelligence.
So should we buy the current high? Maybe, but before we do, let’s consider something outside of the news and charts.
The world first started paying attention to BTC back in 2013. Prices had been hovering below $100, and then, just as Santa started showing up in stores, Bitcoin rocketed to $1152. The rally ended with a spike and then a crash. It was epic. Whomever was holding a $100 BTC order saw their returns multiply by 10.
But not everyone fared well. Greedy traders who decided to HODL saw their profit margin tank. Some jumped ship and cashed in their respectable results. Others continued to hold and even fell into a minus. The big winners were the ones who bought at $100 and sold at $1000. And then came the first chilling crypto winter. 3 years of flattened price ranges and empty speculation.
In the summer of 2017, BTC thawed and started shining once again. Day after day we financial journalists reported on fresh all-time highs, and everyone who had bought into the new crypto-wave celebrated the hype loud and proud. And once again, as Christmas trees appeared in shopping malls, Bitcoin turned cold and the big dump began. It was catastrophic. The rise from $1,156 to $17,760 had been slow and steady, but the crashes that followed were immediate.
The first 4K dip started on December 17 while everyone was busy preparing for the holidays. By Christmas eve, it was down to $13,300. A bumpy rebound back to $15,150 appeased the nervous holiday traders, and then… the bottom completely fell out. In just three weeks, Bitcoin dived to $6,967, leaving the late adopters holding the bill, and those who stubbornly held for a reversal had a very long wait.
For three years, we all awaited the next Bitcoin rally. News of nations and companies adopting BTC as a valid payments system nudged the needle up, but the minor gains were soon after lost. Bitcoin was stuck in a rut. And then, as the autumn chill of 2020 reminded us that Christmas was just around the corner, Bitcoin reawakened once again. Volatility was brutal, and BTC became a day traders playground, which brings us to today.
So, Bitcoin has finally hit 100K and this psychologically round number is very relevant. Traders, hedge fund managers, and big investors all set future targets at which to sell, and the round numbers are milestones that influence the markets. So will it rise more or fall?
Let’s speculate logically. Expecting a selloff after 100K is not a stretch of the imagination, especially when the seasons also seem to play a part in the Bitcoin story. And when it comes to seasonal influences, Christmas is strangely a big one.
Time and time again we’ve seen bullish shifts in October, leading up to epic Christmas spikes, followed by new year crashes. It didn’t happen that way every time, not every year, but it’s something to consider. Of course, past performance doesn’t guarantee future results. Just because it happened before, doesn’t mean it will happen again. But holiday sentiment is a real factor that should not be ignored. Every experienced trader is familiar with the Santa Rally for good reason.
Conclusion
As Christmas quickly approaches, we face a tough decision. Do we ride the current trend, or short BTC with expectations of a new year fall? When it comes to catching any reversals, your job is to react to the market with as little delay as possible.
If you haven’t already installed a mobile trading app on your phone, do so without delay. To efficiently trade Bitcoin, you’ll need instant market updates and the ability to open or close trades on the spot, and a mobile trading app is by far the best option.
Not sure if you want to trade BTC? That’s understandable. You might feel like the money train has already left the station. It’s a complicated situation. Traders often suffer at the hands of FOMO (Fear of Missing Out) and make rash decisions when it comes to Bitcoin.
Emotions are always the enemy of analysis, but you should never ignore strong negative instincts. As the saying goes, if it looks too good to be true, it probably is. If you’re going to skip Bitcoin trading this holiday season, consider placing an order on a risk-free demo account, but beware. Virtual losses don’t hurt, but virtual wins can sting a little. Whatever you choose to do, always trade without pressure, but also trade without regret.