Buy the Pump, Sell the Dump — Does Momentum Investing Work in Bitcoin?

Since the start of the year, Bitcoin (BTC) price has been as high as $9,200 — a 2-month high — while going as low as $6,900 on Jan. 3. Bitcoin’s volatility is one of the most frequently discussed issues that arise when investors evaluate Bitcoin as an asset class. However, its volatile behavior is what provides an opportunity for investors to take advantage of the price movements and make a profit. 

Following predictions as optimistic as the $100,000 forecast based on the stock-to-flow model, investors may foresee another period of high price speculation, opening the door for a wider set of investment strategies. 

On the other side, if investors end up experiencing a bearish scenario like the majority of 2018 and a portion of 2019, bolder strategies based on wide price movements may serve as a good alternative for market makers. 

Cryptocurrency market weekly overview. Source: Coin360

Strategies based on large price movements have been exploited for decades in traditional…