Bitcoin was up past $12,000, but then made a slight retreat. Virtual currency looks likely to retain its strength in coming weeks. Image Credit: Gulf News Archive

New York: Bitcoin reminded investors of both its promise and peril in trading this weekend.

The world's largest cryptocurrency rose to $12,112 in trading just after midnight New York time Sunday - its first foray above $12,000 since August 2019. But it plunged shortly thereafter - 30 minutes after the high, it had dropped to $10,638. 

"In the short-term Bitcoin's daily momentum indicators are overbought (as they are for gold), but beyond some very near-term choppy trading, Bitcoin is likely to continue to trend to its next resistance level at $13,800," according to Rob Sluymer, technical strategist at Fundstrat Global Advisors LLC.

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Bitcoin has rallied strongly in recent days after rising above $10,000. It had fallen as low as $4,904 in mid-March around the height of coronavirus-fueled market uncertainty, but by mid-May was back around $9,000.

Staying in contention

While cryptocurrencies' volatility continues to attract skeptics, JPMorgan Chase & Co. in June noted that Bitcoin's rally back from the March depths suggests it has staying power.

The cryptocurrency's notable moves both last weekend and this one recall a similar phenomenon in 2019, when outsized gains took place numerous times during Saturday and Sunday trading as the price rose from a few thousand dollars into five-digit range.