Bitcoin has been trading at late-January highs, and the experts are tipping upside. Warren Buffet educated us to be “greedy when others are fearful” and while nowadays I’m less worried, would I buy this cryptocurrency at current levels?

When it comes to Bitcoin (BTC), the likes of Warren Buffett advises that you shouldn’t invest in anything you don’t understand. The late Chalie Munger, Buffett’s partner and the man he regarded as the smartest when it came to investing, described bitcoin as “rat poison”!

Given my position as an investment educator and financial adviser, I keep trying to get a sensible handle on BTC. But let me say, it isn’t easy. If you want to speculate/gamble, you’d simply buy this cryptocurrency when it sells off big time and just hope nothing comes along to kill your gains and your starting investment.

This isn’t the kind of investing I like to recommend, though I have shared at times that influential US investors like Bill Miller (who was the former chief investment officer of Legg Mason Capital Management) have advised a 1% exposure to Bitcoin actually isn’t a bad play. If you’d bought Bitcoin on big dips this has been a good strategy.

Right now, Bitcoin is around its all-time highs after a bounce back, thanks to the Trump U-turns on tariffs. This is the latest question for the OG cryptocurrency, however: can it actually go higher, or are we at a point of resistance?

Welcome to the resistance

Bitcoin has been trading at late-January highs, and $108,000 (the next key level to watch to the upside) is in sight. Experts are tipping upside: “Aside from the possibility that price temporarily pauses at this key resistance … the positive trend going into this test of resistance indicates price should ultimately break higher,” Ari Wald, chart analyst at Oppenheimer, told CNBC. “In the meantime, [it’s] important to hold $92,000 support around the 200-day average.”

Another believer in a higher Bitcoin is Katie Stockton, founder of Fairlead Strategies. Katie has said bitcoin’s short-term momentum is positive and that there are no sell signals. However, since the short-term breakout above $100,000, gives an implication that it could fade from here, she said.

“We are expecting the short-term rally to mature in the near term, rather than a breakout to new highs [but there are] signs of upside exhaustion have arisen in equities, to which Bitcoin has been correlated. Sentiment can be considered too bullish within the context of weakened long-term momentum.”

The chart above shows the correlation between bitcoin, the Nasdaq (IXIC), the ASX200 and the Nasdaq 100 (QF).

Although intermediate-term momentum is positive, it wouldn’t be surprising if Bitcoin whipsaws lower if it doesn’t break out to new highs, she added.

If you invested in the Nasdaq (i.e. the high-tech index) you’d be up 105%. Don't believe me? Check out the chart below. If you’d fallen into bitcoin, you’re up over 1000%!

So, as usual, Bitcoin is for thrill seekers! To me it has often felt like it belongs better on a casino floor than a trading floor. But, for those looking to buy, market crashes have often taken the value cryptocurrency with it. When the US stock market fell by over 20%, the price of Bitcoin slid at a similar rate (seen in the first chart I shared above).

The digital gold rush is still going

While these charts indicate that Bitcoin has lately been seen as a tech play, it once was compared to gold. This means it was bought as a hedge when investors feared uncertainty would hurt stock prices.

Steven Lubka, managing director of Swan Private Client Services, thinks this Bitcoin/Gold proxy could still be relevant.

“It’s a best of both worlds scenario, where if there’s liquidity and the stock market does well, investors expect bitcoin to do well,” he told CNBC.  However, he adds: “if there is a monetary shift, if there are high tariffs, if there is a big trade war, bitcoin is relatively unimpacted by that, and it can perform like gold in some of those scenarios.”

Many would disagree with Lubka. The only time I’d play Bitcoin, expecting it to do better than conventional and more reliable investments, would be when its price is tumbling to find a new, more-permanent floor.

Warren Buffet educated us to be “greedy when others are fearful”. While nowadays I’m less worried about bitcoin, I wouldn’t risk it at high prices and expect to see the kind of big gains we’ve seen over the past five years.

Since the Trump U-turns, bitcoin is up 27%, while the Nasdaq is up around 22%, which given their respective risks makes me more interested in the best US tech companies rather than an ill-defined plaything that at the moment is well-regarded by enough investors to make it an OK play. I could never bring myself call it a "reliable" or "safe" investment decision due to its volatility.

When it comes to investing, it’s always a “pick your poison” situation. Especially when you're considering where to set yourself on the risk spectrum when investing.

Just don't forget, Charlie Munger called bitcoin “rat poison”.