Bitcoin Decouples from Risk Assets as Price Jumps Past $5,800, But is it Temporary?
- Bitcoin is bullish, could rise above $6,000
- But the pain not over, BTC is not expected to from v bottom
In a sudden move, the Bitcoin price has started rising, going as high as $5,782 for now. At the time of writing, BTC/USD has been trading around $5,860 with 24 hours gains of 9% while managing the daily trading volume of $1.9 billion.
US stock futures meanwhile fell lower on Thursday indicating yet another tough day for the markets. European markets opened higher but lost their gains with Asian markets are having another down day.
Bitcoin’s decoupling from the stock market was seen yesterday as well when bitcoin went to $5,500 while Wall Street had a brutal day when benchmark indexes fell 5%.
However, over the weekend as well, Bitcoin price jumped to nearly $6,000 on the back of Federal Reserve slashing rate cuts to zero and restarting QE, only to drop below $4,500.
“HUGELY bullish dynamics for Bitcoin right now, BTC flat during HISTORIC risk-off days in markets,” said Hunter Horsley, CEO of Bitwise.
Bitcoin along with gold started decoupling from the S&P 500 about three days ago. Here, on-chain analyst Will Woo sees Bitcoin forming an accumulation pattern and gold a double bottom.
Gold and BTC hinting at a de-coupling from the SP500 starting 3 days ago. Gold may be forming a double bottom, while BTC maybe forming an accumulation pattern. pic.twitter.com/BTNROmZYtC
— Willy Woo (@woonomic) March 19, 2020
However, economist and trader Alex Kruger isn’t really sure of this move, expecting it to be temporary, as he said,
“BTC has largely decoupled from risk assets in the last two days. Not fully though, e.g. this morning's pump was a mirror of the US stocks upmove at the open. I think this is temporary.”
Bitcoin looking bullish
Ever since bitcoin started recovering from its crash where it declined over 63% from February 2020 high on March 12 in line with the risky assets, Bitcoin has been hovering around $5,000.
Given that the price drop has left miners unprofitable and reward halving coming, industry commentators are expecting the crypto asset to range instead of dropping in a V bottom.
Trader Crypto Michael is seeing the digital asset surging above $6,000 but it doesn’t mean there won't be any more pain ahead for bitcoin.
”Valid bullish divergence applied on the markets on 4-hour, which could suit a slight upwards bounce to $6,100-6,400.
Also closing CME gap there + taking liquidity. However, anticipating that we're going to see some more blood after. $4,800 needs to hold.”
Today will be brutal. For bitcoin as well
— Majin (@majinsayan) March 19, 2020
Although given the stock market’s negative reaction to the continued stimulus of central banks, some are expecting bitcoin to take a hit as well, if even a small percent of this stimulus finds a way into the crypto market, cryptocurrency will surge with 72% on Coinbase already buying.