Bitcoin Retakes $7,000 as Stock Market Continues to Mount Comeback

Somehow, someway, the price of Bitcoin has continued to show resilience after March 12’s capitulation event, decisively retaking $7,000 on Monday morning after trying (and failing) to surmount this level three times in the past week.

Now, the cryptocurrency trades at $7,100, up 5% in the past day and up 20% since last week’s lows at just under $5,900.

The cryptocurrency ‘s latest bout of strength comes as the stock market has managed to mount a strong comeback, despite the coronavirus outbreak and economic conditions continue to weaken on the weekend, epitomized by the 6.6 million jobless claims in the U.S. alone last week.

Thus far, the S&P 500 is up 5% since the Monday morning open, which is, of course, how much Bitcoin is up during Monday’s session.

Analysts Expect Bitcoin to Rally Further

The recent strength in the crypto market has convinced many that Bitcoin is ready to extend its gains even higher, despite the feelings of unease that may remain from when BTC crashed 50% in a 24-hour time period.

Bloomberg wrote last week that Bitcoin’s recent move higher has allowed it to trigger a “positive divergence and a buy signal,” according to the indicator the DVAN Buying and Selling Pressure Gauge. BTC last saw this trend in January, prior to the 50% surge from $7,000 to $10,500. The same indicator also flipped bearish when BTC fell under $10,000 in the middle of February, adding credence to the recent signal.

The call for upside has been echoed by individual crypto traders.

Bitcoin analyst Filb Filb — who accurately predicted the trajectory of BTC (down to the $) in Q4 2019 and January 2020 — wrote in his Telegram channel that his personal indicator suggests “we are good on trend and volume,” adding that a simple technical analysis of the chart implies a rally to $8,150 in the coming days. $8,150 is nearly 15% higher than the current market price.

To add to this, analysts have observed a clear increase in consumers’ interest in buying Bitcoin over recent weeks, epitomized by the Coinbase report reported on by Blockonomi previously. The leading exchange wrote last week:

“But beyond just a rush, two things are clear: customers of our retail brokerage were buyers during the drop, and Bitcoin was the clear favorite. Our customers typically buy 60% more than they sell but during the crash this jumped to 67%, taking advantage of market troughs and representing strong demand for crypto assets even during extreme volatility.”

Top Fund Manager Predicts Secondary Stock Market Crash

The short-term outlook for Bitcoin seems to be strong, but a top Wall Street investor is worried about a secondary stock market crash, which could adversely affect all capital markets, gold and crypto-assets included.

Guggenheim’s chief investment officer, Minerd, explained in a note published April 5th that the stock market could drop another 40% from where it is now:

We need to see the other shoe drop. When the markets start to see some of the data on unemployment rising and economic growth and corporate earnings contracting, there will be another level of panic.

Indeed, with GDP undoubtedly slowing down and unemployment on the rise, the chance of another downturn in the stock market after the 25% rebound seems to be growing.

While Bitcoin may be deviating from stocks as it stands, analysts agree that another capitulation event in the stock market would trigger another rush for dollar liquidity, which would even push BTC and gold lower as institutions rush to de-risk their portfolios.

Long-Term Outlook

Whether or not Bitcoin continues higher or lower in the short term, the long-term outlook continues to shape up for this nascent asset class.

Anthony Pompliano, a partner at crypto fund Morgan Creek Digital, made that abundantly clear in a recent interview with a leading precious metal news outlet and retailer, Kitco.

He said to the outlet that despite the recent drawdown, Bitcoin is still on track to “rally hundreds of percent” to $100,000 in the coming years. The exact prediction is $100,000 by December 2021, just over eighteen months from now.

Pompliano cited the trend amongst central banks and governments to continue to print money like there’s no tomorrow, coupled with the impending arrival of May’s halving. These factors, Pompliano explained, will work in tandem to increase the demand of Bitcoin in a time when the scarcity of the cryptocurrency increases, resulting in a simultaneous positive demand shock and negative supply shock.

1,070


Bitcoin & Ethereum Binary Options


Coronavirus News Live

Source: https://blockonomi.com/bitcoin-retakes-7000/