After a difficult week, Bitcoin has finally gained some momentum and crossed $50,000. This is seen by many traders as a major recovery and a possible return to the bullish trend that we have been seeing in the last few months. The cryptocurrency saw a major drop in value during the last few days of February where it dropped close to $43,000. This could mean the end of the current pullback that Bitcoin is facing and the possibility of breaking yet another all-time high which the currency saw less than 2 weeks ago.
At the time of writing, the value is sitting just under $51,000 and that is a major indicator that the market correction period has ended. The milestone to be achieved for that was $50k and the new upward movement means we could see a resumption of Bitcoin trading at its full pace again. According to the Singaporean firm, Signum Capital’s managing partner John Ng Pangilinan “The correction looks to have ended with a move above $50,000. Securing a foothold above that level is key to the resumption of the broader uptrend and a move toward new record highs.”
The psychological hurdle that $50k represented has been overcome finally and the market’s current state is also much more positive than it was in mid-February when there was significant bullish leverage present in the market. Furthermore, the demand for more Bitcoins from institutional investors remains strong in the market as well, as was observed on Coinbase Pro by CryptoQuant. According to a tweet by CryptoQuant’s CEO Ki Young Ju, institutional investors are showing major bitcoin purchases as 13,000 Bitcoin went into custody wallets on Coinbase. He commented that this is the strongest bullish trend he had ever seen.
However, even with all that, gaining a new all-time high could prove to be a big challenge for Bitcoin as the rally for US bond yields continues. Stack Funds’ co-founder and COO Matthew Dibb said, “From a fundamental perspective, we are still at the mercy of macro markets. Knee jerk reactions in the bond market and volatile equities may continue to prove ‘risk off’ correlations with Bitcoin.” He also added that “We remain extremely bullish but would not be surprised to see further volatility in the short term.”
With the bond yields crossing the highest value in over a year to more than 1.6%, there has been major selling pressure on both stocks and Bitcoin. Add to that the potential prospect of an early monetary stimulus from the FED and you can see why that could prove to be a challenge in the newly established bull run for Bitcoin.
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