Earlier today, Cointelegraph reported that “the price of Bitcoin (BTC) posted its strongest performance in the second quarter of history” despite a surprising drop to $ 3,750 on March 13. Skew’s data also shows that Bitcoin currently has a quarterly return of 42.39%. Digital asset remains the best performing for 2020 with a return of 27.31%.
Macro assets of returns for the year to date%. Source: biased
Data from online analytics provider glassnode also showed that since the Black Thursday crash, the total number of Bitcoin whales has risen above the 2017 high to 1,800 in the past 3 months.
Another positive sign of investor sentiment towards Bitcoin comes from a recent survey by the cryptocurrency custodian Bitcoin IRA showing that 43% of the platform’s clients expect the price of Bitcoin to top $ 15,000 by the end of 2020.
After surveying 300 clients, the custody provider found that 57% of participants confirmed that they buy and hold crypto assets as a long-term investment.
Each of these data points underscores the growing bullish sentiment surrounding Bitcoin’s price despite short-term price action showing top-ranked crypto asset trading in a neutral zone.
Bitcoin price continues to consolidate
BTC USDT daily chart. Source: TradingView
As of this writing, the price is still lowered between 20-MA and the midline of a descending channel. The $ 9,200- $ 9,550 resistance group remains a hurdle for the digital asset to overcome.
As previously discussed by Cointelegraph Markets, the Bollinger Bands daily 4-hour time frame shows that it is consolidating and Bitcoin is forming higher lows in the daily time frame despite the fact that trading volume is relatively flat.
In a recent update of the Bitcoin market to customers, Delphi Digital noted that “Bitcoin has been operating in a relatively narrow range for the past month, spending the vast majority of time between $ 9,000 and $ 10,000.”
BTC-USD vs 30 days of realized volatility. Source: Delphi Digital, Bloomberg
The research group also noted that “BTC’s 30-day volatility has fallen to its lowest level of the year, which has historically preceded considerable price movements as the vol reverses.”
BTC-USD vs intraday price range. Source: Delphi Digital, Coinbase, Gemini
Delphi Digital also noted that as the Bitcoin price consolidates between a key overhead resistance and a crucial underlying support zone, intraday volatility decreased, suggesting that a strong directional move is imminent.
Volatility, COVID-19 and correlation.
Since the coronavirus pandemic led to a sharp correction in the stock markets in early March 2020, Bitcoin’s price action has followed that of traditional markets. The sharp rally in BTC price from $ 3,750 to $ 10,350 occurred in conjunction with the V-shaped recovery currently seen in the S&P 500 and the Dow.
Currently, crypto investors are deeply interested in knowing whether the short-term correlation between asset classes will be maintained or if a decoupling will occur.
In private comments with Cointelegraph, Delphi Digital market analyst Kevin Kelly said:
“Historically, when the S&P 500 gains 15% or more in any calendar quarter, in each case (9 before this) in the past 80 years, the index also ended the following quarter in positive territory. I would now say a positive Q3 for SPX it is far from guaranteed, but it is still a remarkable statistic, especially if you expect BTC to continue to operate in line with the riskiest asset classes in the near term. ”
Regarding market volatility within equity markets and its impact on Bitcoin’s price action, Kelly explained that:
“If the volatility of the stock market remains high (or above the historical average), then I would expect the correlation between stocks and BTC to remain relatively high as well. Historically, the big spikes in the VIX, for example, have coincided with big sales in BTC, so if we were to see another violent tranche in equities, I would expect BTC to suffer in the short term as well. ”
For good reason, stocks and cryptocurrency investors remain concerned that markets will suffer due to the drastic rise in COVID-19 infections in several U.S. states, the recent European Union ban on Americans who They travel to EU countries and the effect their will have on the American airline and the global tourism industry.
According to Kelly:
“When you think about it, the main short-term catalysts for both are quite similar, that is, historical political responses to a major economic collapse. Furthermore, currency devaluation can actually offer a supply to stocks as demand for scarcity and real assets increases. ”
The general opinion among analysts is that in the coming weeks the price of Bitcoin could return to recent lows if the $ 8,800 support collapses. Despite this slight short-term bearish bias, BTC’s market structure and bullish investor sentiment suggest that the digital asset remains well positioned for further gains in the third quarter.
