The crypto currencies can recover on Thursday from the decline of the past days. Bitcoin is heading straight for the USD 6000 mark and investors are pumping over USD 10 billion into the market. Meanwhile, the traditional markets continue to stumble. Is this a chance for the cryptos? We look at the current market situation.
Bitcoin + 11%
With a price increase of about 11%, Bitcoin was priced at USD 5735 at the time of writing. The important support area at 5000 USD has been an important hedge for days. The daily volume of about 43 billion USD shows the increasing interest of investors. With this, Bitcoin defies the development on the international stock markets, which are still struggling with the consequences of the pandemic.
On these borders it depends now
The Bitcoin is facing resistance at 5800 USD. Should it fall, a timely breach of the USD 6000 mark would be quite realistic. This is the highest level from last Sunday. From the bearish perspective, the trend line at 5500 USD now forms a new support level. However, it is questionable whether this has the necessary stability. Further down, the next important borders are at 5000 USD, 4800 USD and 4500 USD.
Due to the current market situation, experts are keeping their heads down with price forecasts. The coronavirus continues to keep the world on tenterhooks and the traditional markets are in a fist-thick crisis. When the financial crisis turned the markets upside down in 2008, Bitcoin did not yet exist. Therefore, there are no comparable values to the current situation. Nobody knows whether the stock markets will pull the Bitcoin price down or whether the “digital gold” will succeed in a permanent encapsulation.
Pros and cons
The low overall market capitalization and the panic of investors suggest that Bitcoin will adapt and follow the traditional markets. The high volatility can act as a high-risk leverage and strongly fuel the downtrend. Investors are speculating in one of the most unpredictable markets in the world. Daily price fluctuations in the double-digit percentage range are regarded as the absolute norm. On the other hand, uptrends, like the one we are seeing today, give courage for an independent future for the No.1 crypto currency. BTC friends continue to believe in the highly praised properties of the digital currency. Due to its limited occurrence, high degree of decentralization and cross-border independence, Bitcoin has the best prerequisites to be a crisis-proof “Store of Value”.
Bitcoin Dominance Index rises
With a BTC Dominance Index of 64.6 %, the current balance of power between the BTC and alternative assets is clear. Investors are focusing on Bitcoin and the Altcoins are almost disappearing. Today, Thursday, Ethereum, Ripple and Co are benefiting from the current upward trend of the first mover. Steem is attacking the top 40 with a price increase of 140% and IOTA (+30%) is giving a sign of life. In the Top 10, most coins record a daily gain of about 10 %. Alternative assets are thus recovering slightly from the strains of the past few days. However, one cannot speak of a market normalization for a long time yet. The coronavirus is dictating the international headlines and nations are working at full speed on solutions. Nobody knows what long-term consequences will result from this situation.