The events pertaining to the COVID-19 crisis that have unfolded during the last couple of months have led to increasing levels of economic uncertainty throughout the world. Additionally, the US is currently dealing with intense street protests in a number of cities, thus further affecting financial well-being.
These events have all worked together towards bringing a new bull run to the cryptocurrency market. Data now shows that bitcoin has once again risen above the $10,000 threshold. Thus, a price climb of over $500 has occurred in less than 30 minutes – this definitely has us reminiscing Bitcoin’s past bull runs.
This value increase has affected most of the top-tier cryptocurrencies, similarly to past events. Thus, coins like Ethereum, Bitcoin Cash, Ripple, Litecoin, EOS, and others are also in the green.
The $10,000 threshold is often described as a psychological resistance barrier. The idea is simple – if BTC crosses this value, its chances of reaching a new all-time high increase considerably. It is too early to determine whether BTC is bound to surpass its $20,000 record during 2020, yet if the current global state-of-affairs continues, more and more people might want to seek refuge in alternative currencies that are guarded by the laws of supply and demand.
It is important to keep in mind the fact that Bitcoin has also recently gone through yet another halving event, where miner rewards were cut by 50% - a process that occurs every four years or so, in order to reduce supply and further increase price and demand. Historically, this has led to significant price increases, so investors throughout the world are certainly hopeful.
In fact, following the recent price surge, reports indicate that traders liquidated $123 million in short positions via the BitMEX platform. Across all exchanges, the value of liquidated short positions may very well be over $1 billion. Furthermore, increased trading volumes were also noticed.
A downside to the market at this point in time is that the general public is understandably wary of making a hasty crypto purchase decision, due to the worldwide economic uncertainty. Unemployment rates have skyrocketed, whereas salaries have dropped for many. A recession has already commenced in some countries, while others speculate that a worldwide economic crisis will soon hit.
Despite these aspects, many analysts believe that bitcoin will stay strong, and succeed in showing people that it’s also capable of holding its value during crises.