Bitcoin Back Over $8K as Traditional Markets Rebound

Bitcoin is witnessing recovery rally alongside stocks and oil, a day after hitting two-month lows.

AccessTimeIconMar 10, 2020 at 11:39 a.m. UTC
Updated Sep 14, 2021 at 8:17 a.m. UTC

Bitcoin is witnessing a recovery rally alongside the traditional finance markets a day after slumping to two-month lows.

The top cryptocurrency by market value is currently trading near $8,070, representing a 6 percent gain on lows near $7,625 registered on Monday, according to CoinDesk's Bitcoin Price Index.

Major European equity indices including Germany's DAX and France's CAC are also flashing green at press time, while S&P 500 futures are currently up by over 4 percent.

Oil prices are reporting a 7 percent gain and the U.S. 10-year note yield is trading at 0.70 percent, up nearly 35 basis points from Monday’s record low of 0.35 percent.

Gold, however, is down nearly 1 percent at $1,665 per ounce.

The recovery may be associated with hopes for fresh fiscal stimulus from U.S. authorities, as pointed out by popular analyst Holger Schaepitz. President Trump announced Monday that the White House and Congress will meet Tuesday to consider substantial economic relief measures, which may include a payroll tax cut.

Staying positive

Bitcoin may extend today's gains if equities continue to regain poise. Moreover, with the reward halving (a 50 percent supply cut) due in May, the macro view from some crypto fund managers remains optimistic.

"I expect bitcoin and the broader crypto markets to rebound quickly against the broader equity markets on the back of continuing wider adoption and strong sentiment," Hong-Kong based investment fund Kenetic's co-founder and managing partner Jehan Chu told CoinDesk.

"I think short term this macro market shock will make it difficult for funds and startups to raise money, but mid to long term it absolutely strengthens the use case of blockchain technology and crypto," Chu added.

Seller exhaustion?


The long-tail attached to Monday’s daily candle indicates bear fatigue. Further, the MACD histogram on the four-hour chart is printing higher lows below the zero line, a sign of weakening bearish momentum.

So a stronger recovery to $8,200 (Monday's high) cannot be ruled out. That said, bitcoin will remain bearish as long as prices stay below the head-and-shoulders neckline resistance, currently at $8,480.

On the downside, Monday's low of $7,625 is key support. If breached, that could cause more sellers to join the market and lead to a drop toward $7,000.

Disclosure: The author holds no cryptocurrency at the time of writing.

Correction: Bitcoin's low of $7,625 was reached on Monday, not Friday.


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