E Crypto Markets Are Showing Immunity To COVID-19

By most accounts, the cryptocurrency markets have responded reasonably well to the disastrous economic effects of the COVID-19 pandemic. Bitcoin valuations have been influenced by recent news stories that center around the historic “halving” of these assets and this event has market analysts expecting price moves that extend much higher in the months ahead. Relative valuations in the BTC/USD crypto pair have already shown a high level of stability, even when compared to the performances of traditional market stalwarts like the S&P 500. Overall, this suggests cryptocurrency markets might be showing signs of immunity when we consider how the global economic effects of COVID-19 have impacted relative market valuations in BTC/USD.

Source: Author via TradingView

Market valuations in the BTC/USD currency pair are quickly approaching the prior breakdown highs that rest above 10,500 and a clear break of this resistance zone would suggest crypto markets are ready to test supply levels resting just below the 14,000 level. In the chart above, we can see a large portion of the rally that followed the market’s initial surge in downside price volatility. Of course, this was a market move that hurt most asset classes because investors quickly moved out of stocks and other assets (such as gold and silver) to favor cash positions instead. 

From a technical perspective, the initial upside breakout was signaled by a move in prices above the Ichimoku Cloud (or Kumo) structure during the final week of April 2020. This technical event preceded the decisive break of resistance that occurred near the 7,000 handle and eventually initiated the price rally that sent BTC/USD back into the five-digit territory. During the month of May, however, the BTC/USD crypto pair has traded sideways and this has allowed readings in the stochastics indicator to move back below the 50 level that differentiates between bullish and bearish positioning. 

Source: Author via TradingView

1 2
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.