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Welcome to our Bitcoin and Altcoin report for week 18! – In the usual way, we want to provide you, together with the Accointing team, a vision of the most important metrics, analysis and fundamental data. Today we take a special look at the price of Bitcoin, which rose around 20% on Wednesday and is approaching the $ 10,000 mark.
A lot has happened after our report asked the question 14 days ago if Bitcoin’s price has bottomed. BTC has been gaining momentum in the past 48 hours, increasing in double-digit percentages. So today we wonder if we have already reached Halving Bullrun?
Bitcoin price: the correlation with the S & P500 and gold
At the beginning of our report, we always take a look at the classic financial market. We consider the Standard and Poors 500 (S & P500) and precious metal gold, which is currently in high demand. We reach the following conclusion:
What is certain is that Bitcoin performs strongly in the year-to-date perspective. However, we would like to see the correlation between BTC, the S & P500 and gold. The S & P500 only opened a few hours ago, but it’s already red after the past few days have tended to be green.
Bitcoin price is from current perspective [17:00 Uhr] Around 7 percentage points higher and performs on both gold and the S & P500.
The bottom line: BTC shows strong performance both in the short term and from YTD’s perspective. The correlation is still there. The deciding factor will probably be how the price of Bitcoin will behave in the coming days. A positive catalyst is likely to be Bitcoin’s halving, which can generate its own momentum and thus further decouple the correlation between BTC and the classic financial market.
Now let’s take a look at the Bitcoin price chart.
Does Bitcoin’s halving bring the final decision?
Halving 2020 is approaching. The countdown is ticking and for many investors and crypto enthusiasts it is probably the most exciting crypto event this year. As a result, expectations are high.
Can this already be seen on the graph and where are we really when we look at a broader time horizon?
The chart above shows the period from November 2017 to the expected day of Bitcoin Halving 2020: May 12. First of all, we can see here that the massive price drop in March, which was triggered by global turmoil in the financial market, was quickly absorbed by the lower (red) trend line. As a result, the slow but steady recovery of the Bitcoin price began.
With yesterday’s massive surge, the price of Bitcoin broke the 200 DMA line up. Such an advance is considered a bullish signal. The big question, however, is whether we can exit the channel (marked by the two red trend lines) and thus clear the way for new all-time highs.
Too much for graphics. Now let’s take a look at the most important chain data.
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The most important chain data at a glance
Insights from Glassnode’s blockchain experts repeatedly provide interesting insights into the overall condition of the Bitcoin ecosystem. Analyzes go far beyond the course of Bitcoin and provide us with fundamental information.
For example, we are currently seeing that the fall in March led many HODLers to expand their portfolios and use low prices to buy. The following graph visualizes this phenomenon very well:
We see a significant increase in directions with more than 1 BTC since the collapse in mid-March.
Before we get to the mood of the market, let’s take a look at the exchanges. Specifically, we look at the Bitcoin balances on the exchanges. These give us interesting insights into the minds of many investors. In addition, let’s draw possible conclusions about the development of the Bitcoin course:
We can affirm that the balance of bitcoin on the exchanges has decreased constantly from the highest point on February 7, 2020. The return flow is around 275,000 BTC in absolute terms. How can these numbers be interpreted?
With the steady decline, we can clearly see that many investors and HODLers are withdrawing their BTCs from the exchanges and moving in the direction of secure cold storage. From this, in turn, we can conclude that there is less Bitcoin available for sale, reducing the supply and liquidity available. This in turn leads to higher prices.
Bitcoin price and the fear and greed index
The mandatory part of our report is a look at the Fear and Greed Index. How is the mood in the market? – Is there fear or is it already in the direction of greed?
After having an extremely low value of 13 two weeks ago, the fear and greed index recovered significantly. Yesterday’s rise in the price of Bitcoin probably did its part here. The mood is currently largely neutral.
However, a further price increase and halving can inevitably quickly push the index in the direction of greed. We are already noticing that investors fear missing something. The classic definition of FOMO.
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Interest in halving 2020 increases significantly
How is it supposed to be different? – Bitcoin Halving 2020 is, of course, the dominant theme. In our last report, we already discussed in detail its consequences for mining. Today we want to keep the halving part relatively short.
We note that halving is the first of their careers for many Bitcoiners. Therefore, the tension is high and many newcomers are interested in its effects and slowly begin to understand the lasting consequences of halving supply in the course of Bitcoin.
Interest in our digital world is, of course, always in the form of Google search queries. Therefore, it is not surprising that we are currently seeing a significant increase in the term Bitcoin halving.
Conclusion: what’s next for the bitcoin course?
As mentioned above, liquidity is the dominant factor behind Bitcoin’s price spike in the past few hours. There are fewer and fewer sellers, and many BTCs are now in the hands of classic HOD trainees. Even those who were still expecting cheap prices had to realize yesterday that the chances of this are getting smaller. The formula for the increase can be expressed very simply:
More buyers + little liquidity = high prices
The open question, however, is how to proceed with the Bitcoin course? – We know from the past that BTC is very happy to move with great force and speed. Reminder: In 2017, the course took 34 days to go from $ 5,000 to $ 20,000. In 2019, it took Bitcoin 15 days to increase from $ 8,000 to almost $ 14,000. Has this time of year arrived now? – Maybe!
Of course we cannot guarantee this. What is certain, however, is that the panic surrounding COVID19 is slowly receding, world markets are recovering, money printing machines are still casting the BRRR tone, and halving is spreading FOMO among many people.
With all the euphoria, we should still be prepared for setbacks and corrections in the coming months. They are part of a healthy growth and market. Therefore, we keep our eyes on price development, on-chain data, and, of course, macroeconomic development.
In conclusion, we draw the following conclusion: Forget about short-term trends, understand the added value of Bitcoin, and focus on the big picture. In this sense, halving may come!
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Do you have any questions or suggestions about the Bitcoin course and the Altcoin report? – You can find more information about accointing at www.accointing.com
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[Bildquelle: Shutterstock, Glassnode, skew.com, alternative.me, blockwaresolutions.com]
