Roller coaster ride
The first quarter is coming to an end and many investors are speculating about how the cryptos will continue? How will the coronavirus affect Bitcoin in the coming weeks? Is the halving event coming to an end? Questions upon questions… We take a look at the current situation.
The first quarter…
Bitcoin got the year off to a brilliant start on the crypto parquet floor. The No.1 crypto currency shot up from around 7200 USD to around 9300 USD in January. Subsequently, it didn’t take long for the BTC to climb above the magical USD 10000 mark on February 9. Total market capitalisation then approached the 300 billion mark, and the hype was real.
USA-Iran crisis as price accelerator?
When the traditional markets reacted with concern and uncertainty to the US-Iran conflict, Bitcoin recorded considerable price gains and underpinned its reputation as a crisis-stable “store of value”. At the same time, Wuhan residents were struggling with the initial effects of Covid-19, at which point few saw the beginning of a tangible global economic crisis.
As the corona virus spread at a rapid pace across the globe, traditional markets plunged into the abyss. Within a few days, trading on Wall Street was halted several times and the DAX lost all its gains from the previous year. These slumps did not leave Bitcoin unaffected. The drastic effects became clear on 12 February: – 40% in 24 hours! The “digital gold” slipped below the important USD 5000 mark in some places due to the strong panic selling and insecure investors pulled over USD 100 billion out of the volatile crypto market.
Many voices even predicted a total crash for Bitcoin after the mega-dump. But once again the digital currency defied the negative news. The 5000 USD border became an important basis for subtle price gains and the bulls gradually returned. In the process, the BTC became increasingly isolated from the traditional markets. At the end of the 1st quarter, there is now renewed hope for the coming events.
Bitcoin price stable
On 31 March, Bitcoin was quoted at USD 6438. The BTC was already at this level for the entire previous week, and this seems to be the new basis. Upwards, the next major resistance is still at 6800 USD. Should the bulls take over the market again, we could rediscover the BTC chart at the beginning of April at the February level. The high volatility would allow the crypto market, within the corona crisis, to recover from the price drops and make a strong statement.
The prospects for an imminent recovery are not bad. In addition, the upcoming Bitcoin Halving Event should not be ignored. In about 45 days the Coin Rewards for the miners will be halved. The halving is an integral part of the Bitcoin system and is anchored in the first block, the Genesis block. Accordingly, the Miner Rewards will be halved after 210000 mined blocks in order to keep the inflation rate of the crypto currency in check in the long term. The event is considered one of the biggest highlights of the current crypto year.
The first quarter was not for the faint of heart and the coming months are full of surprises. Should Bitcoin be able to further isolate itself from the traditional markets, a comeback in the five-digit USD range would be quite conceivable. In that case, the Bitcoin Halving Event could spur the share price even further. However, at the moment the chart is primarily tied to the developments around the coronavirus pandemic.