The price of bitcoin has continued to rally in today’s trading session, following on from yesterday’s solid break above the $7000 level on the back of improving sediment in world stockmarkets after several report released showing the lockdown being enforced in most countries to slowdown the spread of the coronavirus is starting to have a substantial effect.
New cases in the virus are slowing in places like Italy and spain where they have stayed in the 4,000 range and reaching a peak of 6,500 new cases just a few weeks ago. In New York, the state in the U.S with the most cases, has also seen a slight drop in infections which for now has brought on a wave of optimism in the markets.
"Bitcoin and cryptocurrency purchases follow the signs of improving sentiment in the stock markets," said Alex Kuptsikevich, senior financial analyst.
"As soon as risk assets start to attract demand actively, institutional investors may also increase their positions in the cryptocurrency." He added.
The question is now is whether this latest rally can be sustained as the $7000 mark proved to be a huge barrier last week where after hitting this price there was an immediate rejection as the sellers jumped in.
Some analysts believe that this time, the momentum is with the bulls and this latest rally looks to be the real deal and if the price can manage to stay above this critical level over the next few days the price is poised to travel higher.
The next resistance level for the world’s most popular cryptocurrency is around the $8000 mark which was the price before all these issues with the coronavirus began
“Last week’s break above the $7,000 level was limited by profit taking, but today’s move above $7,000 is much more convincing because there is little evidence of stop loss selling,” said Denis Vinokourov, head of research for London-based digital asset firm Bequant.
“This, together with further widening of spread between futures and spot pricing, and bullish options flow positioning, suggests that the market will continue to grind higher.” He added.