Bitcoin has surged unexpectedly, rising to $10,000 and returning its pre-coronavirus outbreak bull run to the bitcoin market.
The bitcoin price, which has risen by more than 30% since the end of March, has nearly reversed its losses in the coronavirus crash – and outperforms the U.S. The S&P 500 index and most other important stocks.
It soared higher on Wednesday morning, prodding $9,000 per bitcoin before reverting on the Luxembourg-based Bitstamp bitcoin and cryptocurrency exchange to trade about $8,800.
"Bitcoin is now trading at a critical inflexion point, where significant Fibonacci retracements, 50-day moving averages and 10-day moving averages converge on the daily chart," experts at the Singapore-based Bitcoin index fund Stack wrote in a report, adding that resistance to upkeep could see "further price action upside towards $9,300" but cautioned potential investors over "short-term headwinds."
U.S. stocks ended higher on Wednesday, adding to earlier gains as investor excitement about possible coronavirus treatment increased, some lockdowns eased, and chairman of the Federal Reserve Jerome Powell said he was willing to move deeper to prop up the lockdown-ravaged economy.
"It may well be the case that the economy needs more support," Powell said after the Fed's two-day plenary session, speaking at an event.
The dovish approach of the Fed has massively boosted the price of bitcoin and most other assets, while crypto market observers have pointed to the powerful underlying feeling of bitcoin for its outsized success.
"The majority of investors in the market are bullish, with many having a long-term investment horizon unfazed by recent volatility. This overall sentiment could act as support for the bitcoin price over the next few weeks, though we aren't entirely out of the woods yet," said Rich Rosenblum, co-head of trading at algorithmic digital asset trader GSR, pointing to a "clearer path" back to economics and "the impact of the economic stimulus" as driving "positive macro sentiment."
The bitcoin price has surpassed most other assets lately, with year-to-date returns of Bitcoin outperforming gold, up around 25 percent, and 12 percent, respectively, since the start of the year.
Also, it has overshadowed recent gains achieved by the S&P 500, which has so far fallen by about 10 per cent by 2020.
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