Bitcoin Exploding Amid China Virus Fears
Last night, Bitcoin (BTC) surged to its fresh year-to-date high. It moved sharply higher amid the China stock market, plummeting on its reopening following an extended Lunar New Year break.
In addition to that, investors began to worry about the spreading coronavirus that might weigh on China’s output in the coming months. And this may include manufacturing, material, and consumer goods companies as part of the hardest-hit stocks.
Bitcoin boosted to 2020 highs of $9,620. And this is somehow advancing its reputation as a so-called safe-haven asset. Also, this is a fly in the face of warnings that the price could be about to collapse.
At the time of the writing, the coronavirus has now killed 361 people in China and one in the Philippines. The confirmed infections in China are now topping at 17,000.
Before recovering slightly, the Shanghai Composite index declined to almost 9% at its open. And this happened despite China’s central bank announced new measures to ease the impact of the outbreak.
In the first few weeks of 2020, Bitcoin has gained about 30% since the beginning of 2020. The initial boost was due to geopolitical concerns regarding the mounting tensions between the U.S. and Iran. Then, it was because of the escalating fears the coronavirus could knock global trade.
Aside from that, BTC and cryptocurrency analysts see the $10,000 mark as the next barrier. According to Adam Vettese, he believes that the target might be in reach due to the clearing of the $9,600 hurdle.
Vettese noted, “With speculation that Bitcoin is on track to break the $10,000 barrier following a sustained rally. (BTC) still sits around a healthy $9,300.”
Then, deVere Group’s chief executive Nigel Green explained that the ongoing upward trajectory of the BTC price links to the spread of the coronavirus. Also, he added that traders need to expect the crypto’s price to further increase until the coronavirus peaks.
Green stated, “The more individual cases that are identified, the more countries around the world that are affected. And the greater the impact on traditional financial markets, the higher the price of bitcoin has jumped.”
Meanwhile, others suggested that Bitcoin still has a lot to gain as market confidence falls.
Managing partner with blockchain investment and advisory firm Kenetic Capital said that as the trust worsens in global institutions and markets, they will see highly mobile digital assets such as BTC to explode in value.
But last week, investors received a warning that the recent BTC rally might have happened too quickly and gone too far.
In the analysis of Bitcoin technical data, it showed that BTC prices were over the upper-band limit of the GTI Vera Band Indicator. And this is something that has twice recently hinted an imminent correction.
Moreover, the coronavirus has also made some problems for the Bitcoin and crypto industry.
Last week, the two crypto mining hardware manufacturers warned customers about the delay in shipments at least a week due to the coronavirus quarantine in China.
Vettese revealed that a lot of firms had extended the New Year holidays, and a few even went as far as February 10th.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!