Bitcoin jumps $2,000 in 2 Days and is Outperforming Gold and S&P500
The rise in Bitcoin’s prices back above the $9,000 mark has brought back Bitcoin to the top as the highest performing asset of 2020, once again. Previously, the largest cryptocurrency by market capitalization was fighting head-to-head against Tesla for the top spot before the COVID-19 flash crash in February. According to Forbes, the year-to-date returns of Bitcoin stands at 25% which surpasses the 12% recorded by gold and is significantly above the recent gains of S&P 500 which is still down by 10% in 2020.
With less than 2 weeks left from the highly anticipated Bitcoin’s halving, major price movements saw Bitcoin’s value rise by almost $2,000 in the past few days, breaching $9,000. According to CoinTelegraph, a few notable levels such as resistance at $8,000, the 61.% Fibonacci retracement, the 100 and 200-day moving average and expected resistance at $8,500 were passed for the price to hover around 8.7k at the time of writing .
Many factors are said to contribute to this price rally. One if it being the rising numbers of small investors. Data from Glassnode as reported by Coindesk shows that number of network addresses with at least 0.1 BTC has hit a record high of 3,010,784 as of Monday. This also could be the result of many spending their $1,200 stimulus checks on Bitcoin as we previously covered.
Image Source: Coin Speaker
Another driving factor seems to be the fear of missing out (FOMO) sentiment with halving in the horizon. History of price rally after a halving as happened in 2012 and 2016 could have played a part in the recent price rally. In addition, the coverage on the upcoming halving in recent months together with rising search volume for ‘bitcoin halving’ on Google indicates that FOMO is driving many to try investing in Bitcoin according to Danny Kim, head of revenue at SFOX. Co-founder of cryptocurrency research firm Delphi Digital, Kevin Kelly, shares similar sentiment saying that traders’ FOMO would have encouraged the price rally as reported on Yahoo Finance.
The simple supply-demand theory was mentioned by Michael Dubrovsky, cofounder of the mining company PoWx to explain how the halving impacts price. The halving would reduce Bitcoin’s supply in the market as miners would have less to sell. Thus, price will increase if demand stays the same as there is less supply. On the other hand, increased demands from others such as institutional investors and lesser supply will also cause price to increase.
In a recent survey, 66% of Europeans believe that Bitcoin will still be around in the next 10 years. With such strong market sentiment, it is important to understand and follow the underlying trend to ensure you do not miss out on important market opportunities.
On top of that, it is just days away from the Bitcoin halving which leaves little time if you plan to possibly capitalize on the recent halving hype. Start trading now on VHCEx spot or VHCEx Contracts with leverage up to X150 times.
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