The price of Bitcoin has skyrocketed about 50% so far this month to a high of $8390, following a 28% rally the month before. The crypto currency has surged past its 200-day moving average, all the way down at around $4440. In other words, BTC/USD would have to half from here to get back to this long-term moving average. The distance between it and this moving average makes it susceptible for a drop, as prices do tend to revert to the mean from time to time. In fact, Bitcoin is looking extremely ‘overbought' in the short-term. So, for the sake of healthy price action, Bitcoin will either need to correct itself or, ideally for the bulls, consolidate for a while before it makes further gains. Indeed, the Relative Strength Index (RSI) is already at extremely overbought levels around 80. In fact, Bitcoin was in the process of potentially forming a bearish outside bar candle on its daily chart, so this phase of the uptrend could come to an end. But zooming out, it is worth pointing out that Bitcoin has not even retraced to its shallow Fibonacci level of 38.2% at $9440 against its record high. So, this year's rally is certainly impressive but it does not necessarily mean the long-term bear trend has ended.
BEST BROKERS TO TRADE CRYPTO
Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.