Bitcoin Diverges From Falling Equities With $500 Price Rise

March 30, 2020 at 03:09PM

The top cryptocurrency by market value picked up bids near $5,850 during the Asian trading hours and rose around $500 to $6,344 at 07:14 UTC. At press time, the global average price, as calculated by CoinDesk’s Bitcoin Price Index, was at $6,290, up 7 percent on the day. Bitcoin found takers even though stocks in Asia dipped alongside losses in S&P 500 futures, possibly over renewed fears of a prolonged coronavirus-led lockdown across the globe.

President Donald Trump abruptly abandoned his talk of life returning to normal in some parts of the U.S. by Easter and instead extended social distancing rules through April. That forced markets to price in the possibility of a deeper economic slowdown in the world’s largest economy. European equity markets are also trading in the red at press time, with the U.K.’s FTSE 100 and France’s CAC index reporting 0.5 percent declines.

Bitcoin putting in a positive performance as stocks suffer may bring cheer to investors and analysts who believe the cryptocurrency is a safe haven asset like gold.
However, it’s still too early to say the cryptocurrency has now decoupled from equities. After all, the 90-day correlation between bitcoin’s price and the S&P 500 rose to 0.52 earlier this month, the highest level on record, according to Arcane Research.

Further, with the virus outbreak showing no signs of slowing down, investors may continue to hold cash (U.S. dollar). Analysts at Goldman Sachs believe the economic fallout in the west has only just begun. Meanwhile, central banks and governments across the globe look to have run out of ammo, having already fired their big “bazookas” over the last couple of weeks. As a result, another liquidity crisis, similar to the one seen a few weeks ago, cannot be ruled out. In that case, bitcoin could again feel the pull of gravity alongside the sell-off in stocks.

The Fed announced an unlimited asset purchase plan last Monday to contain the economic fallout from the virus outbreak. Meanwhile, the U.S. Congress approved a $2 trillion fiscal stimulus plan on Friday that was promptly signed into law by President Trump.

Bitcoin Diverges From Falling Equities With $500 Price Rise, CoinDesk, Mar 30

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From: The FxPro News Team
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