In the last few days, the price of Bitcoin has grown by about 22%. Investors might be using the cryptocurrency as a safeguard of value.
After experiencing a steep drop in recent days, the price of Bitcoin recovered and continues to rise. Those investors who currently see the cryptocurrency as a haven of value might have driven this sudden increase.
Since last March 18th, Bitcoin has been enjoying new bullish momentum that has led its price from around USD 5,000 to around USD 6,650. As has happened on previous occasions, the catalyst for this new price rise could be the fact that Bitcoin can become a good refuge to safeguard the value of money.
The current global economic situation could be encouraging various investors to seek ways to avoid losses like those experienced in traditional financial markets, as well as to prepare for probable future inflation. Similarly, the printing of USD 1 trillion and the cut of interest rates to 0% by the US Federal Reserve could become a cause for concern for a large number of holders of the US fiat currency.
In this sense, the printing of such a large amount of fiat money, which is not backed by any other asset, could be the necessary factor to encourage various investors to buy Bitcoin. This situation also has the potential to decouple the observed relationship between Bitcoin and the stock market, which caused both markets to plummet simultaneously.
Bullish Momentum Indicating Recovery
After doing a quick analysis of the Bitcoin candlestick chart, in periods of one hour, it is possible to observe interesting data. At 10:30 a.m. UTC, on March 18th, the price of the first cryptocurrency was USD 5,050. However, starting at 1:30 p.m., a candlestick recorded that Bitcoin went from being worth USD 5,100 to USD 5,400 in less than an hour.
The rest of that day, the market was testing supports in the USD 5,200 range, whilst maintaining resistance at USD 5,400. This would not last long as more noticeable bullish momentum began on March 19th. On this date, the price went from USD 5,280 to USD 6,200, which represents an increase of 14.8% in a period not longer than 12 hours.
During the other half of March 19th, the price of Bitcoin maintained some stability. However, on March 20th the cryptocurrency registered another considerable increase in its price. At 1:30 p.m., on that day, Bitcoin climbed to be worth around USD 6,900 for a short period. Currently, it is possible to appreciate that the market is testing new supports in the range of USD 6,500.
Taking into account the lowest price of Bitcoin on March 18th, and comparing it with its current price, there has been an increase of about 22% in the last few days. The increase in the daily trading volume of Bitcoin has supported that rise in its price. According to data provided by CoinMarketCap, it is about USD 57 billion at the time of writing this article.
By Alexander Salazar