Bitcoin recently broke a-multiple-month old resistance point to enter the $11,000 price zone after breaking a six-months-old all-time high of $11,188. The reason for this sudden spike can be linked to a number of factors. However, it is obvious the global turmoil was the underlying factor of market advancement.
US banks have been approved to provide custody for Bitcoin and other altcoins of which the surprising news may have increased demand and a subsequent spike in price according to Bitcoin analyst Gary McFarlane.
The behavior of the risk-on market has also played a huge role in getting Bitcoin into the 5-digit price zone. In this time of crisis, the global stock market has broken an all-time high with the dollar struggling to survive its march low. Bitcoin, which has developed a close correlation with the equity market has benefited from its performance. This correlation seems to pose a greater risk following the tension between the US and China.
The global stock market was positively affected by the expectation of the stimulus aid package by the US government, and the European Union fiscal stimulus package.
Positive change of the institutional interest has also been a factor in causing the Bitcoin price to rise.
Institutional interest was stewarded by the listing of the Bitcoin Futures by the Chicago Mercantile Exchange (CME). The interest rose to $452 million which is a monthly high after rising by 15%. The global open interest has risen to $4 billion after its March 2020 performance. Interestingly, the global interest possibly has a larger gap ahead to cover which may send the price even higher. It is intriguing to understand that the recent breakout had a fragment of speculation coupled with obvious valuation.
Back to the stimulus package introduction, Galaxy Digital CEO Michael Novogratz believes that BTC price will soar to $20,000 by the end of the year unless something goes wrong. He holds that the $2.2 trillion stimulus package will see prices skyrocketing in the next three months.
Coupled with the liquidity pump, Bitcoin has a fair retail interest with the stock market investors expected to shift their interest to Bitcoin and gold. The impact of the Bitcoin halving wasn’t mentioned, but it could also be a key factor contributing to the recent market performance and the expected future trading price.