A number of signals continue to tie Bitcoin to the present global economic crisis. Although the flagship cryptocurrency has shown stability over the past few days, some analysts now see more price drops ahead.
Global Stock Market Will Impact Bitcoin
Josh Rager has posted a chart showing that the S&P 500 (SPX) has dropped below its 200 weeks moving average for the first time since the 2008 financial crisis.
This move is significant, as the last time the SPX fell below this line it remained there for more than two years as a bear market took over Wall Street. Rager predicts that should the trend continue Bitcoin prices will clearly suffer as investors will have little fiat to put into the crypto space.
The analyst has also been skeptical of any short-term price increases, noting on twitter that he favors short trades if Bitcoin breaks USD $7,000:
Not that I’m bullish, I just have short entries between $7k to $8k
— Josh Rager ? (@Josh_Rager) March 26, 2020
Rager’s company, BlockRoots, posted a video yesterday with more data indicating that Bitcoin’s price may continue to suffer as the global economy slides into a recession. Notably, it notes that more than three million Americans are now out of work, and much more likely will soon be. This staggering number can only indicate an impending bear market.
Can BTC Prove to be a Safe Haven?
Rager’s prediction notwithstanding, there is no shortage of other analysts that predict a notable increase in Bitcoin’s price. In fact, whereas the global economic situation is indeed dire, it is also creating an excellent scenario where many investors will be seeking safe havens for their assets. Not surprisingly, gold prices are moving up along with other hard commodities.
Should this trend continue the crypto market should also see greater interest. Importantly, governments are now eager to print large amounts of fiat, which is all but certain to cause inflation. In years past, Bitcoin has always gained strength under such circumstances.
Also, there has been no drop in development across the blockchain space, nor has network activity suffered as a result of the price volatility. Mining activity remains strong as does interest in trading. Importantly, large institutions continue to show interest in platforms such as Ethereum and VeChain.
A key test for Bitcoin will be the upcoming block halving, which remains on track for May. An expected price increase will reinforce the argument that Bitcoin’s fundamentals remain strong, and cryptocurrency remains on-track for mass adoption.
Do you think Bitcoin price rally next week? Let us know your thoughts below in the comments.
Images via Bitcoinist Media Library, Josh Rager