As global equity markets continue to get pummeled, bitcoin’s return to the $9,000 level may have been driven by some of the same forces causing a rally in bonds – a desire for respite from a coronavirus-plagued markets.
After sharp gains in price Thursday, bitcoin (BTC) has been trading steadily in a range between $9,000 and $9,200. For the past 24 hours, bitcoin’s price change has been minimal, down half a percent as of 18:00 UTC (1 p.m. ET).
Traders see bitcoin’s jump back into the $9,000 range as another sign bitcoin is trending upward in 2020 while traditional markets stumble. Year to date, bitcoin is up over 26 percent while the S&P 500 stock index is down 9 percent. Cryptocurrency sentiment appears bullish as prices remain above significant moving averages.
Although traders seem to be open to viewing the cryptocurrency markets as a safe haven from stock market turmoil, more volatility is possible ahead of May’s halving, an event that will slash in half the reward bitcoin miners obtain.
“It’s a relief rally. In my opinion, we have a likelihood of sweeping another low before the post-halvening rally,” said Mostafa Al-Mashita of Canadian crypto brokerage firm Secure Digital Markets.
“I believe gold and BTC are safe havens,” said Henrik Kugelberg, a Sweden-based crypto OTC trader. “As coronavirus has just started to spread, I believe a strong market will last well until the halving will have effect. To me it seems plausible that we can hit an all-time high this year, perhaps within six months.”
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