Optimism has seeped into the cryptocurrency markets this week, as President Trump unveiled steps to reopening the U.S. and countries around the world glimpse light at the end of the coronavirus tunnel.
The testing of China’s digital yuan—along with the trial of other CBDCs globally—is also strengthening the bullish cause, with the transition to digital currency now looking more inevitable than ever.
This bullish sentiment has benefited both Bitcoin and Ether, which are up 3% and 8% respectively over the last seven days, and small-cap coins like DigiByte which is sitting on 3% weekly gains.
Bitcoin follows hopeful stock market higher
The coronavirus has replaced the halving as the dominant discussion topic in crypto investment circles, according to a study published Wednesday by TheTIE and eToro.
This narrative explains why bitcoin is pushing higher with U.S. stock indices on optimism that the peak of the virus has passed.
Institutional investors are also responding to the favorable risk environment. Open interest in bitcoin futures on the Chicago Mercantile Exchange (CME) has increased significantly since the panic of Black Thursday, suggesting institutions want a slice of the action.
In its quarterly report, Grayscale has revealed that institutions invested $503.7 million into its crypto funds during Q1 2020. This is the most significant quarterly influx ever for the trust and suggests institutions are still confident in cryptocurrency despite the recent market turmoil.
As these bullish headlines hit, the bitcoin price has been moving up, leading analysts like Plan B to double down on his stock-to-flow model with calls for a “10x in price” in the “1-2 yrs after the halving”, just like in 2012 and 2016.
To stay bullish in the short term, bitcoin needs to hold above support at $6,900, where it has reclaimed the low of the previous range.
A breakout above $7,500 would likely lead more buyers into the market and could push the price up to the next resistance level at near $8,100.
Ether rallies on stablecoin boom
Bitcoin proved more popular than Ether with institutions buying cryptocurrency through Grayscale in Q1 2020, with BTC representing 77% of all purchases, and ETH 22%.
But over the last week, Ether has outpaced bitcoin with 8% gains.
This price surge could be related to the proliferation of stablecoins on the Ethereum network, and the global demand for dollars in any form.
As trader Hsaka pointed out on Twitter, Tether and other stablecoin creators have been busy issuing new coins as Federal Reserve Chairman Jerome Powell has been printing dollars for fiscal stimulus. This stablecoin demand could be related to the global demand for dollars, or just people selling bitcoin for $USDT to hedge their positions.
On the chart, $ETH is now sitting against resistance at $170. If the price breaks through this level, then the next stop is likely to be $190.
DigiByte surged this week as COVID-related events flung the proof-of-stake cryptocurrency into the spotlight.
The DigiByte Foundation announced a partnership with the Covid19 Alert! app on Monday, with the shared goal of helping the non-profit track individuals that have come into contact with other people that may have already contracted the virus, without compromising privacy.
Founder Jared Tate has also turned his attention to mask-making, helping to garner publicity for the cryptocurrency by releasing Bitcoin and DigiByte-themed virus protection for shipping around the world.
$DGB is now pushing against resistance at 650 sats. Beyond here, the next stop is likely to be 800 sats.
The information in this article is for informational and educational purposes only and should not be considered financial or investment advice. Investing in ICOs, IEO’s, cryptocurrencies, or tokens is highly speculative, and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.