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mercoledì 18 marzo 2020

These 3 Simple Reasons Suggest Bitcoin Is Ready to Surge Higher

Although there are many investors anticipating Bitcoin will fall once again, citing the global uncertainty that is epitomized by the Dow Jones’ record 3,000-point loss on Monday, there are some reasons to believe the cryptocurrency may soon mount a recovery.
Related Reading: Crypto Tidbits: Bitcoin Plunges 50%, COVID-19 Cases at Ethereum Event, Central Banks Inject Billions

3 Reasons Why Bitcoin Could Soon Rally Higher

Prominent cryptocurrency analyst Trajan recently shared three reasons why being long Bitcoin is a “decent bet” at the moment.
  • The S&P 500 has started to rally: After Monday’s historic drop that sent global investors into a panic, the stock market has started to mount a recovery, responding to news from the Federal Reserve and the White House of large-scale liquidity injections and fiscal stimulus. As it stands, the S&P 500 is up 3% from the daily open, which should lead to growth in Bitcoin due to the growing correlation between markets.
  • BitMEX’s perpetual swap funding rate is heavily favoring longs: BitMEX traders are heavily short, meaning that long positions holders are paid a fair sum of capital each day. Extreme funding rates often mark tops and bottoms for Bitcoin, and in this case, the short-heavy markeZt implies BTC is bottoming.
  • Bitcoin is trading at $5,000: And lastly, Bitcoin is trading in the $5,000s, which Trajan thinks is a decent entry point for longs.

There Are Other Reasons to Be Bullish

There are other reasons to be bullish on Bitcoin.
Bitcoin became fundamentally undervalued for the first time since the 2018 bottom, with two indicators from digital asset manager Charles Edwards — daily active users and transaction value per Metcalfe’s law — now trending above the price of BTC.
This has been backed up by Charlie Morris of ByteTree, who on Thursday remarked that Bitcoin’s fair value, derived from the on-chain activity metrics and how many coins there are in existence, then sat at $6,400, far above BTC’s current (as of the time of this article’s writing) price of $5,300.
Furthermore, on March 16th, Bitcoin infrastructure startup Bakkt announced that it has just completed a $300 million USD Series B fundraising round, garnering the support of the Intercontinental Exchange (owner of the New York Stock Exchange), Microsoft’s venture capital arm M12, and Boston Consulting Group. These companies participated in the firm’s Series A round, which saw Starbucks chip in.
Related Reading: Scarily Accurate Fractal: Bitcoin Will Trade at $20,000 By Q1 2021
So while cryptocurrencies may be losing their value at a rapid clip, it is clear that big-name investors see Bitcoin and its ilk as anything but dead.
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Nick Chong
Since 2013, Nick has shown interest in Bitcoin and cryptocurrencies. He has since become involved in the industry as a full-time content creator, working for NewsBTC, Bitcoinist, LongHash, among other outlets. Aside from covering...

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