Bitcoin FINALLY breaks through that resistance at 20k which it has been bumping up against for months the very day AFTER the Mt. Gox lawsuit settlement announcement.
When you are dealing with an inferior, hyped and over-bought asset, you buy the rumor, sell the news, meaning you get in as the rumer generates hype, but get out before the event/announcement et cetera actually happens, because the reality never lives up to expectations. You are not betting the fundamentals of the asset, but on group psychology.
When you are dealing with an asset that does have solid fundamentals in the midsts of a bull run, and the rumor is what they call “FUD” (fear, uncertainty, and doubt) then the strategy would be to short the rumor and exit before the news. The rumor triggers a pull back, as fearful holders exit their positions. When the news turns out to be underwhelming (as it often is) then the bull run continues, at which point you would switch back to a long position.
