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Bitcoin Just Surged 10% to $5,800: Here’s What Traders Think Is Next

After a brutal showing last week that saw Bitcoin fall 50% in a 24-hour time span, bulls are mounting a comeback. Over the past four hours, the cryptocurrency has rallied approximately 10% to a price as high as $5,900, surging from the $5,400 base where it spent a majority of Tuesday and Wednesday.

The asset’s rally comes as traditional markets, specifically the American stock market (indices S&P 500, Dow, etc.), have started to mount a recovery after a brutal start to the week. In fact, the Dow Jones is up 6% from the lows on Wednesday, which coincided with a local BTC bottom, further indicating that the stock market and Bitcoin are correlated for the time being.

While BTC has only been sustained the region just shy of $6,000 for a short period of time, the sentiment is mounting that BTC is bottoming and poised to break higher after accumulation.

Bitcoin Has Bottomed, Is Now Accumulating 

Almost every prominent analyst and their mother, so to say, has said that Bitcoin is in the midst of bottoming, despite traditional markets remaining in the midst of a downturn.

DonAlt, the trader who called much of the recent downturn while others were expecting Bitcoin to establish a new all-time high, remarked that “we’re in the process of bottoming,” sharing the below chart, which shows the previous bottom overlaid and fit to the current price action.

DonAlt’s belief that Bitcoin has found a bottom is corroborated by the spike in the CBOE’s volatility index for the S&P 500, the VIX, which recently has started to hit all-time high levels around 90; every time the VIX has passed 30 over the past five years, Bitcoin has found itself at a local or macro bottom.

While DonAlt and others are seemingly skeptical the exact same price action will play out again, the consensus seems to be that BTC, if it is bottoming now, will take months to establish a bottom and push out of that range.

A Perfect Storm

On the fundamental side, PlanB, a pseudonymous institutional investor that works on Bitcoin as a personal project, summed it up the positive trends nicely when he posted the below tweet. He looked to the following fundamental trends to accentuate why he is so bullish on BTC:

  • Leveraged longs, on platforms like BitMEX and OKEx, have been cleared out due to the massive volatility seen last week, setting the stage for recovery.
  • The traditional financial system is in the midst of record-levels of turmoil.
  • Central banks seemingly need to print more than $5 trillion out of thin air to keep the market liquid and afloat.
  • The Bitcoin block reward halving is taking place in May.
Featured Image from Shutterstock

Bitcoin Just Surged 10% to $5,800: Here’s What Traders Think Is Next was last modified: March 19th, 2020 by Nick Chong

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