Bitcoin Touching New Record Prices: Nearing $3,000, Pullback Coming?

Bitcoin has had a wild few weeks. But really, this can’t come as a surprise to anyone. After reaching the $2,800 mark in mid-May, BTC would see a significant drop, all the way down to the sub-$2,000 range. It would stay somewhat flat for a week before eventually picking up steam en route to a steady comeback. Today, however, Bitcoin broke out in a big way, finding a ~10% gain, peaking late in the day, largely due to overseas trading. 

Some have speculated that the price of Bitcoin today has been driven by the lack of available supply. This would simply be an illustration of the basic concept of supply and demand. With an overwhelming number of buyers, and a scarce number of Bitcoins available for sale, the buy/sell spreads, and in turn market prices, are going to skyrocket. This may very well be what happened today.

An interesting note to today’s Bitcoin trading is seen in the second largest crypto market cap, Ethereum. While there has been a generally similar set of swings, both up and down, between the currencies, this was not the case today. ETH was trading near record highs, in all fairness, but it did not experience the gains that BTC did. In fact, the lack of parallels between the two currencies has become more and more apparent in recent weeks. Like gold and silver, ETH and BTC have tended to swing up and down in tandem, but this no longer seems to be the case, at least for the time being.

Pullback at $2,800-$2,900

It seems hard to imagine that a pullback and correction won’t take place. The question, however, is how much. And, in all reality, will it happen at all? If you look at the patterns of the past few weeks, BTC rose to its all time highs near $2,900, then fell to $1,900, then again, today, rose back to near $2,900. This implies that both a “bottom” and a ceiling have been found. The main variable is the flood of new buyers and sellers in the marketplace. Retail and amateur investors can cause precipitous and unforeseen swings in equity markets, and they can very well do the same with BTC. One thing is for sure, though: if you bought Bitcoin at any point prior to today, you have locked in a guaranteed profit…at least on paper…for now.