U.S. Markets closed

Here's What Happened Last Time Bitcoin Approached $10,000

Wayne Duggan

After a brutal price crash in 2018 dropped bitcoin prices from near $20,000 to below $3,400, bitcoin has come roaring back so far in 2019. Prices are up 112 percent year-to-date to above $8,000 for the first time in exactly a year, and bitcoin bulls hope the $10,000 level is coming in the near future.

Bitcoin has a long history of volatile price spikes such as the one the market has experienced so far this year. Unfortunately, those spikes tend to be short-lived.

History Lesson

Bitcoin prices have only been above $10,000 two other times. Bitcoin first hit the $10,000 level during the historic surge in November 2017. In that instance, bitcoin prices ripped through $10,000 and hit its all-time high of $19,783 within roughly a month’s time.

Roughly six weeks later, bitcoin prices were back below $8,200 by the end of January 2018. Bitcoin prices them bounced back above $10,000 by the second week of February 2018. Once again, the rally was short-lived and bitcoin dipped back below $10,000 by the first week of March. In the 14 months since, bitcoin has not regained the $10,000 level.

Bitcoin made a third attempt at breaching $10,000 in April 2018, but the rally was stopped short after prices peaked at $9,593.

The latest rally is the first real signs of technical life from bitcoin since its previous run to $19,783 back in 2017. Bitcoin broke above its 200-day simple moving average in April for the first time in nearly a year. It also made it above its August 2018 peak of $7,362, breaking a string of lower and lower peaks.

How To Play It

If history is any indication, bitcoin traders should be looking for signs of a near-term top, potentially at July 2018 highs of around $8,200 or near the psychological $10,000 level. Bitcoin’s relative strength index is at 89.6, its highest level since mid-2017. An RSI that high suggests the popular cryptocurrency is extremely overbought in the near term.

If bitcoin does rally above $8,000 and even above $10,000, history suggests traders should be ready to take profits in the volatile cryptocurrency, and the rally likely won’t last for long.

Traders looking to take advantage of the volatility in bitcoin prices can trade the Grayscale Bitcoin Trust (Btc) (OTC: GBTC). The GBTC fund is already up 174.1 percent year-to-date.

The price of bitcoin traded at $7,998 at time of publication, according to CoinMarketCap.

Related Links:

Bitcoin And Ethereum Now Accepted At Whole Foods, Nordstrom And Other Retailers

Japan Is Getting Serious About Cryptocurrency

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.