Bitcoin (BTC) has just rebounded sharply as new decisions from the Federal Reserve seem to be helping the traditional market somewhat recover.
The market's largest coin peaked at $ 6,863 on Tuesday, after leaping to $ 6,600 from Monday's bottom of $ 5,700 on March 23.
Part of the reason for Monday's double-digit jump was because the Fed announced it would expand its asset purchase program, in order to help the market recover from the psychological shock caused by the Corona virus.
Good news for Bitcoin?
Recently, many analysts agree that the new policies from the Fed and many central banks may be good news for Bitcoin.
Leonard Neo, director of research at Stack, a cryptocurrency data analysis unit, said:
“We have predicted that a large amount of money will flow into Bitcoin as a consequence of central banks and governments' losing confidence” in the current turbulent times. “
The central bank of New Zealand and Canada also reduced interest rates to zero and announced that they would buy more bonds next week to reduce the economic downturn. In addition, the Bank of Japan and the European Central Bank (ECB) also adjusted interest rates to negative levels.
Agreeing with the majority of views, Joseph Young's analyst and co-founder David Parkinson of Genesis Node also said that this is a good opportunity for Bitcoin.
Several major cities around the world have issued travel restrictions to prevent the virus from spreading, which has resulted in negative impacts on commercial activities.
Everything is still ahead
While the outlook for the future looks bright, Bitcoin's latest price dynamics seem to be greatly affected by the stock market.
The correlation over the 90-day range of Bitcoin and S&P500 prices rose to the threshold of 0.52.
At the moment, the global market is showing signs of strong increase after the efforts of the Fed to prevent crisis. The Euro Stoxx 50 index, Europe's asset index, is now up 5.5% on the day, while the S&P500 derivative index has also increased by 5%. Asian stocks also had positive signs today.
In addition, Gold also has a 4% increase to $ 1,600 an ounce at the present time, after a 3% increase on the previous Monday.
As a result, Bitcoin will be able to retest the psychological resistance of $ 7,000 within the next 24 hours. The specs are also drawing a positive picture for Bitcoin.
Day candle chart
Bitcoin jumped 11.7% on Monday, erasing a bad Sunday candle and signaling a rally from the bottom of $ 4,000 continued.
Besides, the 14-day RSI also broke down the trendline, while MACD also surpassed the 0 threshold to have a positive value.
A resistance of $ 7,139 (the March 20 peak) is likely to be Bitcoin's next target.
EToro analyst Simon Peters said:
“With prices forming new highs and higher lows in the short term, we could reach $ 7,000 in the next few days. However, Bitcoin needs to immediately break out and remove many important resistances. If the resistance of $ 7,000 continues to persist, we can see that prices will bounce back to what happened on March 20. ”
If it fails to stabilize above the declining upper limit of the 5-week MA (currently 6,910 USD), the market can decline to $ 6,500.
However, the scenario will only be negative for Bitcoin once the market falls below Monday's bottom of $ 5,686. At the time of writing, Bitcoin is priced at $ 6,720.
- The Fed's continued easing of monetary policy is a positive sign for Bitcoin.
- With the stock showing signs of recovery and many positive indicators, Bitcoin may retest the $ 7,000 resistance level.
- Monday's bottom ($ 5,686) is an important threshold that can cause the market to reverse.
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According to Coin68 / CoinDesk