The stock market saw an insane rebound on Wednesday, with leading indices such as the S&P 500 and Dow Jones 30 gaining over 4% apiece during the day’s session.
Bitcoin has enjoyed the gains too, rallying by a relatively measly 1% to $8,900, but showing signs that it is still building technical strength for the coming days and weeks, analysts say.
Here is a compilation of some of those factors, which involve both technical analysis and fundamental analysis.
Bitcoin Indicators Suggest Rally Has Room to Upside
- Since falling as low as $8,400 on the weekend, Bitcoin has performed quite well, rallying as high as $8,970 just the other day.
- While prices have since settled around $8,900 in a potential topping pattern, some of the industry’s top analysts have agreed that more upside is an inevitability.
In Blockonomi’s previous market update, we referenced Bloomberg, which wrote that BTC managed to recently retake the lower band of the Trading Envelope Indicator, a “gauge that smooths moving averages to map out higher and lower limits.”
The outlet wrote that this is a sign it may test $10,600 — approximately 17% above the current market price:
It may potentially test the upper limit, which could bring the coin to around $10,600. Bitcoin posted a similar move in mid-December,
This buoyant sentiment has been echoed by others.
Pseudonymous trader Financial Survivalism, who accurately called the date and magnitude of Bitcoin’s rally in January weeks in advance, recently posted the below analysis, opining that he sees remarkable signs of a textbook Wyckoff Accumulation forming on BTC’s chart since the crash from $10,000.
Should the textbook pattern play out, which is similar to the one that marked BTC’s bottom at $6,400 in December, the cryptocurrency will likely end March somewhere around $10,000.
— Tyler D. Coates (alphαnalysis.io) (@Sawcruhteez) March 4, 2020
The fundamentals purportedly back this optimism.
India’s Crypto Ruling Suggests a $9,000+ Bitcoin Is Imminent
Alex Krüger, an economist and trader that closely follows cryptocurrency, remarked that Bitcoin is likely to soon push above $9,000 due to one simple reason, or rather, one news event.
The news event: India’s highest court, the Supreme Court of India, on Wednesday struck down a regulation that effectively resulted in Bitcoin and cryptocurrencies being banned across the nation of 1.3 billion people.
Per previous reports from Blockonomi, the ruling allows banks to facilitate banking transactions with entities dealing with cryptocurrencies (namely startups and Bitcoin exchanges) once again, “removing a major hurdle for the development of the sector,” as put by Reuters.
Indeed, Bloomberg’s analysis of the Supreme Court’s move explained that Wednesday’s ruling means “virtual currency investors and businesses [can] push against stricter rules being planned by a skeptical government,”
On the news, Krüger said that the news was “decidedly bullish” for Bitcoin and other cryptocurrencies, referencing the fact that with the Supreme Court’s ruling, crypto exchanges can once again start cropping up around India, providing a medium through which fiat can flood into digital assets.
Federal Reserve & Governments Continue to Inject Billions Into Economy
To respond to growing fears of a full-blown recession (which some have said could snowball into a depression), the world’s central banks and governments have started implementing fiscal and monetary stimuli.
It started with the Chinese government, which has injected billions into their economy to keep it afloat because China has been so greatly affected by the coronavirus outbreak.
Then just last week, the Hong Kong government unveiled a fiscal stimulus package, revealing an intent to cut certain taxes on payroll and to distribute HK$10,000 to each registered permanent resident.
This is soon to be followed up by similar fiscal packages from Australia, Indonesia, and many other economies — maybe even the U.S.
All this action, economists and traders both in crypto and traditional finance say, will prove the value of investments like gold and Bitcoin.