Bitcoin Soars to Pre-Crash Levels, Breaks Above Key Technical Barrier
The price of bitcoin (BTC) is once again seeing strong gains in the crypto market today, after soaring to levels not seen since before crypto’s “Black Thursday” on March 12, and again positioning the asset above a key technical level in the chart. (Updated at 14:50 UTC, when BTC trades at USD 8,338: updates in bold.)
As of press time (11:40 UTC), bitcoin is up by 4.55% to a price of USD 8,150. The price means that the number one cryptocurrency today has finally broken above the 8,000 mark, which happened to also coincide with the widely followed 200-day moving average level. If the price closes above both of these levels, technical analysis suggests that bullish momentum is strong and that further gains may be ahead of us.
Following the latest price gains, bitcoin has now recovered all of its losses from the severe decline on March 12 and 13, often referred to as crypto’s “Black Thursday,” which brought it down nearly 50%. This is obviously also an important psychological milestone for the market, given earlier comments from prominent investors like Mike Novogratz that bitcoin needs to “rebuild confidence.”
The price gains in bitcoin were also accompanied with strong performance in several other major cryptoassets, such as ethereum (ETH) and bitcoin cash (BCH), which were up by 5.2 and 4.6%, respectively, over the same time period.
Despite the currently optimistic sentiment in the bitcoin market, however, some also point out that the price moves in bitcoin may be more closely correlated to the traditional financial market than bitcoin proponents like to believe. For instance, Bloomberg editor Joe Weisenthal noted today that “Bitcoin continues to basically track S&P futures,” although with a “higher beta,” meaning volatility.
Whatever the case may be, it is clear that today’s bitcoin strong rally has by far outperformed the stock market, with S&P 500 futures currently indicating an open a mere 0.88% higher.
“The Bitcoin halving in under two weeks may explain some of the bullish activity by speculators,” Craig Erlam, senior market analyst at Oanda, wrote in a note, quoted by Bloomberg. “But you have to think that an event that has been in the diary for so long will already be priced in. This could see some of these moves faded as we hit halving day.”
Meanwhile, Christel Quek, Chief Commercial Officer and Co-founder at Bolt Global, told Bloomberg that while BTC should rise into USD 10,000s after the halving, it could be followed with a price drop as investors engage in profit taking as “no level of technical support can stand when the economy is drained.”
“The impact of COVID-19 so close to the halving and bitcoin’s correlation to equity markets means we may not see significant surges in price due to the halving,” Charles Hayter, co-founder and CEO at CryptoCompare, added.