Bitcoin price is back above $9,000, up by 4.02% in the past 24 hours and nearly 22% in 2020 so far. A spike in BTC’s value has the altcoins surging even harder with Tezos (XTZ) leading the market gains with over 12.61%.
“That’s a slight breakout here. Flipping the $8,950-9,000 area as support and we can see $9,150 / $9,250 as next levels. Showing strength and even $9,400 is on the tables,” said trader Crypto Michael.
Bitcoin today moved up but faces a “strong level of resistance” between $8,700 and $9,000, as this is the point where about 800 thousand addresses are holding 5500k of BTC.
“If Bitcoin breaks through that level, then it might experience a minor resistance between $9,000 and $9,260, where 590k addresses previously bought around 400k BTC,” said crypto data website IntoTheBlock.
Based on In-Out Money Around the Current Price (IOMAP) analysis, Bitcoin has the strongest support level in the range between $8500 and $8700 range where over 1 million addresses has previously bought over 720k BTC.
Unlike the past week, today bitcoin moved but the stock market dumped further. The extremely volatile US stocks market that saw the Dow losing 1,000-points gains and an 800-point loss this week, today tumbled 2.3%. The S&P 500 was also down 2.1% while the Nasdaq Composite fell 1.6%.
All of this has been despite the Federal Reserve announcing the emergency 50 basis points rate cut, while the European Central Bank is also ready to join its peers in the US, Canada., and Australia.
“Panic mode is clearly evident,” said Lukman Otunuga, senior research analyst at FXTM.
Amidst this gold is surging as coronavirus cases continue to spread around the globe. April gold futures are up $24.30 an ounce at $1,667.40.
“Gold looks like one of the most attractive assets in this global environment, With US rates likely heading towards the zero lower bound.,” wrote Stephen Innes, chief market strategist at AxiCorp.
Just like gold, investors are piling into Treasuries. The 10-year Treasury yield meanwhile dropped below 0.9% to another record low.
With rates going to zero, macro trader Dan Tapiero says “bonds will no longer act as a stabilizer/hedge and are limited in price appreciation by the zero bound. GOLD is the only liquid hedge with no price cap.”
This stimulus, however, could also be bullish for the crypto market as bitcoin like gold has non-negative yields.
“A down stock market and interest rate cuts may lead to growth in crypto this year. Governments around the world are likely to look to stimulate the economy in any way they can, including using quantitative easing and expanding the money supply (printing money),” said Coinbase CEO Brian Armstrong.
China has already started MMT having printed $173 billion. This Armstrong said may lead these funds into cryptocurrencies as well, which “are viewed as a hedge against inflation.”
“This could be the year where the mindset of institutional investors begins to shift, from crypto as a venture bet, to crypto as a reserve currency,” added Armstrong.
Tapiero also agrees that bitcoin is now becoming a store of value as he explained, “Govt bonds have 50 trillion mkt cap but will be terrible SoV in years to come. A 100m Picasso though is probably good SoV. Personal view-200 bil btc means it’s SoV now.”