Cryptocurrencies surged on Thursday, with Bitcoin surpassing $7,500 for the first time since crashing in late February/early March. The world’s largest cryptocurrency is currently trading at $7,587.07 as of 10:00 Friday 24 April.
Bitcoin rose as much as 10% overnight, while the Bloomberg Galaxy Crypto index – which tracks some of the largest digital assets – rose to as much as 6.3%. Bitcoin crashed 27% on 12 March as financial markets were crippled by the then-burgeoning coronavirus panic.
According to Bloomberg, this latest surge is because of an overall shift in risk sentiment. Ed Moya, a market analyst at Oanda Corp, believes that the token could have enough momentum right now to breach the $8,000 level.
“Bitcoin is starting to attract retail interest again,” Moya wrote in a note. “With worldwide stimulus efforts showing no signs of easing, some traders are jumping into cryptos as a hedge against currency wars.”
Over the past month, cryptocurrencies have been largely moving in conjunction with riskier assets, falling when equities come under pressure and rising when they gain. Stocks rose on Thursday on the back of optimism that parts of the U.S. economy may start to open soon and oil rallying, with the S&P 500 on pace for its best month since October 2011.
Bloomberg says that technical indicators suggest Bitcoin needs to break above $8,000 to start a run higher. In addition, with the 14-day Relative Strength Index (RSI) at 59, it hasn’t entered overbought territory. Assets are considered overbought if the RSI exceeds 70. A break lower could mean Bitcoin falls to around $6,500, another major level of support.
Denis Vinokourov, head of research at Bequant, a London-based digital asset firm, says Bitcoin was “seemingly magnetized by a previous resistance zone around $7,500 level,” and “This significant bullish bias encouraged leveraged money to return.”
Edited by Luis Monzon
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