Bitcoin has remained unperturbed in terms of price action over the weekend despite fresh fears of a Coronavirus second wave having the potential to cause economic woes across the globe.
On Monday Germany reported a dramatic spike in the rate of infections while there has been a swift uptick in cases across a number of states in the United States.
US stock markets are expected to react violently on the weekly open today at 2:30pm BST, although the daily 200 moving average remains a key level of support.
This will undoubtedly affect Bitcoin it has been positively correlated with the S&P500 since the flash crash in March.
If Bitcoin begins a plunge to below $8,830 it would confirm a bearish break down in price, with targets emerging as low as $8,260 and $7,800.
However, if Bitcoin can continue to trade above $9,000 in spite of a potential stock market plummet it would demonstrate notable strength as well as an apparent decoupling.
This, coupled with the recent Bitcoin halving, could cause the world’s largest cryptocurrency to rally as investors seek a safe haven away from flailing traditional assets and shares.
Interestingly, gold is well on its way to forming a new eight-year high as political tensions begin to rise around the world, which bodes well for Bitcoin as it is often considered in the same category.
The next few months will be a coming of age for Bitcoin, if it can show strength and begin to establish support above $10,500 it would set itself up for a surge to a new all-time high later this year, while a break down in price would indicate its relative immaturity, which would lead to a new bear market.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.