Global cryptocurrency markets have been trending up the last week. This comes during a time where traditional markets have been selling off during the Coronavirus outbreak. The stock market never likes uncertainties and that's exactly what it's witnessed the last week. With the uncertainties, analyst have also been downgrading numerous stocks ( mostly travel related ) which is putting a toll on the overall market sentiment. Global cryptocurrency markets have added around $10 billion in value the last week.
Bitcoin Price Rallying During Stock Sell-Offs
Bitcoin on the other hand has followed its historical trend of performing inversely to the S&P500 during market turmoil. If we take a look at the chart below, we can see Bitcoin price action vs SPX ( S&P500) price action. As traditional markets started sharp sell-offs, Bitcoin started displaying "global hedge behavior" that many people were talking about in 2019 during the initial trade wars between the United States and China. It's important to understand that Bitcoin doesn't always act inversely to traditional markets, but it has a pretty strong track record of doing so the last 10+ years during global uncertainties.
Bitcoin Price Setting Up For A Rally?
As we mentioned in a previous bitcoin analysis, we were eyeing the $9,200 levels ever since BTC price surpassed $8,200 levels from a technical standpoint. Bitcoin is currently hovering around $9,000 at the time of this article, and the charts are getting quite interesting.
If we take a look at the chart below, the two bullish indicators right now appear to be the..
- $9,100 resistance level being surpassed
- Bitcoin price potentially inching above the 200 day moving average
Both are strong indicators that can be used to build the bull case right now. With the current formation, it wouldn't be surprising to see Bitcoin test the $9,800 levels in the short term. If you look at the 200 day moving average, theres only a couple scenarios the last year where bitcoin price has rallied above it. In both scenarios, bitcoin has experienced upward momentum. If the Coronavirus uncertainties die down in the traditional markets, you will most likely see the S&P rally pretty hard which could cause bitcoin to cool off in the short-term, but it still has a very solid formation to continue bull mode.
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