After going through a historic sell-off last week, this week, Bitcoin manages to record some gains. Yesterday, the digital asset went up as high as $7,139. What has been even more interesting was the 24 hours daily trading volume on top ten exchanges with real volume surpassing $3 billion.
Meanwhile, The Dow Jones Industrial Average ended up over 17% lower this week with analysts anticipating the worst crisis since 1929.
“This is an unprecedented situation, this is worse than 2008, this is worse than 1987, this is the worst crisis to hit financial markets since the Great Depression,” said Stephen Issacs, the chairman of Alvine Capital Management’s investment committee.
Just like precious metal, bitcoin rose but much sharply which means they could be starting to decouple from the risky assets.
The founder and CEO of leading crypto exchange Binance, Changpeng Zhao, is very bullish on Bitcoin despite the losses it recorded last week as when people fear the doomsday, they hoard cash.
But they will “eventually find out they no longer need to hoard it and will put it back on investment,” said Zhao.
Zhao isn’t “worried about crypto at all,” because “The fundamentals did not change. Unlike fiat, bitcoin remains a currency with limited supply. No one can print more of it. Demand is increasing, especially now. It will be fine.”
He pointed out how the central banks around the world are printing money at a record pace, and “the taxpayers are robbed (made poorer) indirectly.” And bitcoin fixes this, he said.
This will push bitcoin and crypto higher but eventually as right now, “Markets are inefficient. The speed of change propagation is slow, which actually gives us plenty of opportunities,” said Zhao.
Meanwhile, on-chain analyst Willy Woo shared a series of charts that paints a bullish picture of the flagship cryptocurrency.
The non-technical growth can be seen in the bitcoin ATMs, which have grown over 14% in 2020 so far, reaching 7,242.
The bitcoin miner energy ratio is making a “strong rebound,” which indicates lots of energy is being pumped into the bitcoin network. After a period of compression, the difficulty ribbon is also expanding which the analyst said is generally seen as bullish. Though it is too early to say anything, it reinforces that the “mining behind bitcoin is solid and the network is strong.”
Also, at the current on-chain RSI levels, “Nobody went broke buying BTC at these levels of on-chain RSI. (If you are in it for the long game),” observes Woo.
When it comes to Spent Output Profit Ratio (SOPR), the on-chain net position of investors, it is recovering meaning rekt investors are getting out. SOPR has fallen below 1 indicating the owners of the spent outputs were in profit at the time of the transactions.