The market bears took the BTC price down from about $6,768 to $6,675 on Wednesday, March 25, 2020, following a bullish Tuesday wherein the price surged from $6,500.70 to $6,768.85. The king crypto is trading at $6635.12 at the time of writing.
The incredible move to the upside has been a surprise to many BTC investors who had predicted a sustained correction to the $3,000 level was on the cards.
Meanwhile, traditional financial markets have been devastated immensely as the world goes into lockdown, but Crypto markets have witnessed an incredible recovery recently and it appears that BTC price may have just ‘reset’ its fair value along with its reputation as a safe haven asset during the world crisis.
BTC Price Could Benefit From New US Federal Reserve Measures
On March 23, the Federal Reserve announced a plan to unleash unlimited quantitative easing (QE) to boost the US economy after its coronavirus-related plunge.
Understandably, this had a huge impact on all global markets, and eToro analyst and cryptocurrency expert, Simon Peters, has described the potential impact of the Federal Reserve’s QE on Bitcoin:
“Bitcoin rose by 11% yesterday, currently at around $6,700, following the US Federal Reserve’s announcement on unlimited QE to help reduce the economic impact of the Covid-19 pandemic,” said Simon Peters.
To him, this indicates that some investors may be wary that the dollar will lose its value, and are moving back into bitcoin to hedge against inflation. Peters explains that Cryptos have been used similarly in other economies plagued by hyperinflation, such as Venezuela and Argentina.
The analyst concluded that following its previous falls, the price of BTC has been tested and held above the $5,800-$6,000 mark on a number of occasions over the last week, so we could get back to $7,000 in the coming days.
That said, Bitcoin isn’t out of the woods just yet, as it needs to demonstrate strength by closing this evening’s daily candle above $6,800, which became a point of rejection last Friday.
BTC May Not See Any Significant Bullishness Just Yet
Crypto Michaël, a renowned crypto analyst, clarified in a recent tweet that he believes BTC price may test $4,200 before it is able to find ample support to spur the next Bull Run.
According to Michael, in case BTC is incapable of breaking through the existing resistance at the $6,000 level, it will likely see a further downside. However, its mid-to-long-term outlook is positive from a price viewpoint.
Similarly, UB – another popular crypto analyst on Twitter – explained in a tweet that he believes BTC price is poised to see a “rug pull” in the coming days that could lead it significantly lower in the near-term.