Bitcoin Is Again Reaching for the Stars
Over the past few weeks, the world’s number one cryptocurrency by market cap had been struggling to move beyond the low $9,000 mark. The currency traded anywhere between $9,000 and $9,140, though after a surge during yesterday’s early morning hours, it looks like the currency is having no problem remaining in the high $9,200 window.
According to some analysts, the volatility levels for bitcoin and other forms of crypto are unusually low. John Todaro – the director of digital currency research at Trade Block – says that this marginal gain was bound to happen sooner or later, explaining in a statement:
Prior to today’s push higher, bitcoin volatility had declined to recent lows. Given the recent low of volatility, relative to its historical realized volatility, it was apparent that a move to the upside or downside was incoming.
In addition, correlation between bitcoin and stocks also appears to be up at the time of writing. Many have long argued whether that correlation even exists, though simple observation will often show that when bitcoin is up, stocks are up, and vice versa. When one is performing poorly, you can assume that the other will either follow suit or already has.
Today, the S&P 500, the Nasdaq and the Dow Jones have exploded, with the Dow adding more than 450 points to its average over the past two days. Todaro mentioned this correlation as well, explaining:
As for the fundamental reason why bitcoin and digital currencies broadly pushed higher today, I believe they are moving alongside equity markets, which have posted a strong performance on the day as investors once again become more comfortable with risk-on assets.
Veteran market analyst Jim Wyckoff also put his two cents into the equation. He stated his confidence that this is likely only a beginning mark of new bullish trends for bitcoin, and he believes the asset is likely to experience another major surge in the coming weeks.
The Resilience Is There
While $9,200 may not be anything to celebrate, it’s always refreshing to see the world’s primary cryptocurrency defeat the odds against it and exhibit its resilience for all to see, especially when economic traditions as of late have been largely bearish. Thanks to the ongoing coronavirus pandemic, businesses have once again entered a state of closure, with many restaurants, bars and other public areas closing their doors following news that cases have spiked.
Political figures such as Democrat California Governor Gavin Newsom have even resorted to crazy military tactics to ensure businesses and the public follow social distancing rules. With so many people losing their cool over the struggling economy and the spread of the virus, one can’t help but respect BTC for serving as a potential face of reason.