Bitcoin grew by more than 4% and traded close to $9,650 by 10:00 GMT on Thursday. Almost all altcoins have also moved to a steady upward trend. Especially worth mentioning is Ethereum (ETH), which has added 9% in the last 24 hours, reaching $208, having crossed the round mark. Bitcoin Cash (BCH) also shows an impressive growth of almost 14% to $440.
As the crypto market grows, many analysts, including Josh Rager, announce a change of trend, and the new altcoin season. There is every reason for that, especially given the price dynamics related to the coronavirus and traditional market. At the beginning of the next bullish spiral, the crypto community linked this growth to the virus, geopolitics, overbought stocks, tying to gold dynamics, and other factors.
So what do we see now? Panic around the epidemic has eased: Chinese scientists are actively convincing the international community that they have taken control of the situation and developed a vaccine. This news provoked further stock growth; oil bounced back while gold declined. Besides, there is extremely positive news about US-China trade war. In theory, all this could lead to a reversal of the Bitcoin and the entire market to a decline.
So how could Bitcoin get a significant impulse on the background of the coronavirus spreading? It is quite possible to assume a scenario where the epidemic spreads to many countries of the world, provoking governments to close borders. This would immediately lead to a breakdown of all established supply chains and a drop in trade volumes.
The end of broad free trade between countries could cause restrictions on capital movements, as panic provokes asset flight. In that case, Bitcoin and other cryptocurrencies could indeed be considered beneficiaries of the “feast at a time of plague”.
Nevertheless, the situation is improving, and we see active growth. All this suggests that Bitcoin for investors is in a border zone. It’s not a traditional risk asset, as its volatility is still off the charts compared to popular currencies and equities; and yet, it’s not a safe-haven.
Most likely, we are witnessing a situation where investors, investing in stocks against the backdrop of growing optimism, diversify some funds towards Bitcoin. The first cryptocurrency, in its turn, is pulling the rest of the crypto market upwards.
We can assume that BTC will follow the sentiment of large investors, receiving impulses depending on the general direction of the market. Price dynamics can be heated up by the participants of the crypto market themselves, who, however, probably, no longer have the same driving force, which once pushed the rate to $20,000.