Bitcoin seems to be putting in a pretty good performance right now despite the ongoing global economic crisis owed to the Corona Virus pandemic. The top cryptocurrency in the world has closed it trading in the Asian market at $5850 but rose by about $500 overnight to open trading at $6344 by around 7.15 UTC. Index calculations put the average global price of the currency currently at about $6290.
Global investors continue to bet their dollars on Bitcoin as much as the stocks in various regions of the world continue to plummet due to the ongoing fears caused by the pandemic. In the Asian trading market, the Bitcoin found buyers amid the falling stocks.
Is Bitcoin A Haven Of Investment?
In as much as Bitcoin proves a haven of investment, analysts say it is still too early to predict Bitcoin has already decoupled itself from equities. Research by Arcane Research anyway shows that the 1.5-month correlation between the S&P 500 and the Bitcoin finished at its all-time high at 0.52.
In addition to this, with the pandemic yet to reach its peak, investors in the cryptocurrency are likely to still hold on to their liquid cash (mostly in Dollars) as a precaution. Also, with the ongoing liquidation of assets, the Bitcoin is likely to take a downward pull from the liquidation of other assets among them stocks.
Analysts, however, predict that it will decouple from the markets, owing to their large sell out from various large-scale cryptocurrency investors and institutions. Richard Galvin, CEO of the Digital Assets Capital Management said in his tweet that the currency’s correlation to the traditional market will ease since most cross-asset class investors have already sold out. He also added that the potentially inflationary response of the central bank and the sovereign only bode well for the Bitcoin.
Meanwhile, Jehan Chu of Kenetic Capital says the Federal Reserve’s quantitative plan will work to prevent future flights from Bitcoin. He also adds that if the economy suffers no other cataclysmic shock, the currency will rally harder and faster than any other.
Bitcoin’s Impressive Rise In Value Today
Looking at the charts, however, the bull’s failure at last weeks’ key hurdle coupled with the weekly candles with long upper shadows, point to a sell on rising mentality which charts the path of least resistance of the Bitcoin towards the downside.
If the Asian low of the end of the session of $5,850 is not defended by the buyers, then it’s likely the currency will be back to trading at $5000. Currently, the Bitcoin reflects a rise of 3.24% and trades at $6,357.59.