Bitcoin Update: Near-term Technical Risk Could Hurt Prices

Bitcoin and most of the major cryptocurrency markets have staged a robust recovery following the sudden price devaluation from a few days prior. That's great news across the board, particularly for bitcoin newcomers, who may have gotten rattled by the volatility in digital coins.

As I have reiterated in prior posts on Steemit, the long-term potential for bitcoin is very sound and assured. My regression analysis points towards $3,000, which would make those that got in at $2,000 quite happy indeed. Other cryptocurrency assets have also soared back to near-record level heights.

That said, I do want to warn people, especially the newcomers, about the near-term volatility of bitcoin. From a technical analysis perspective, bitcoin is charting a bearish pennant or bearish flag formation. This pattern is characterized by an asset's inability to decisively cross above upside resistance. Like a head-and-shoulders formation, such patterns typically resolve to the downside.

This only matters substantially to daytraders or swing-traders. Those investors that have a longer-term view should simply be aware of the bumps on the road. Cryptocurrency markets can try most people's patience, but patience is exactly what we need to fully enjoy bitcoin's true potential.