Bitcoin confirms rebound
The No.1 crypto currency starts the weekend with a huge jump in price. In the past 24 hours, the Bitcoin recorded a price increase of about 8%. Meanwhile, the stock markets continue to fight against the consequences of the coronavirus pandemic. Will the cryptos survive the current crisis better than other markets?
A glance at the Bitcoin chart is like a rollercoaster ride. After the enormous downward trend of the past few days, there are now some indicators that speak for a comeback of the bulls. The important support area at 5000 USD provides the BTC with a stable base. From there, the “digital gold” was able to start a strong upward trend in the last 48 hours and pulverize several resistances. After breaking above the 5500 USD mark, it took less than 5 hours for the BTC to reach a daily high at around 6400 USD. The 24 hour volume of just under USD 54 billion shows the great interest of investors.
Investors are in a difficult situation. Due to the coronavirus pandemic, the traditional markets are initially in a tangible crisis. But nobody knows to what extent this crisis will affect Bitcoin. After the Down Jones Industrial, the DAX and other stock markets suffered historic slumps, Bitcoin slipped by a whopping 40%. Uncertain investors withdrew their capital from the crypto market and pessimists predicted the total collapse of cryptos. However, the current price trends speak a different language. Bitcoin is recovering from the price slumps and the Altcoins are using the slipstream to limit damage. This is out of the question in the traditional markets. It cannot be ruled out that Bitcoin has already reached its bottom (lowest point) in 2020.
The resistance at $6400 may drop in the next few minutes. Should the Bitcoin be able to confirm this, the bulls will then march straight towards the trend line at 6800 USD. Due to the high volatility, a quick jump above the 7000 USD line would be possible. From the bullish perspective, everything could now happen very quickly. In the past few hours, investors have invested over $30 billion in the market. Fresh capital, a volatile market and the FOMO (Fear of missing out) could even push prices back to the levels of two weeks ago. As a result, mainstream media would probably increasingly present Bitcoin as a crisis-proof store of value. However, this should be treated with caution.
Pump only a snapshot?
From a bearish perspective, we are currently observing a deceptive upward trend before the next bang. The coronavirus pandemic continues to keep global equity markets in a headlock. If this crisis worsens in the coming days, the effects could have fatal (even worse) consequences for the global economy. Even the crypto-market could not protect itself against this.
One should view the recent upward trend with caution. Nobody knows whether Bitcoin has already reached a bottom for the year 2020 with its fall to about 4200 USD. Compared to the traditional markets, crypto space still represents a small niche with a total market capitalization of about USD 180 billion. It is therefore likely that the crypto currencies will again follow the global economy in the event of a new dump. A similar behaviour can currently be observed in the relationship between Bitcoin and Altcoins.
Altcoins follow Bitcoin
The alternative assets still follow Bitcoin at every turn. This behavior results from the high Bitcoin Dominance Index of 65.1%.