The days for Bitcoin (BTC) were great and BTC was sitting on higher support every day. The biggest asset is moving sideways since it rose above $ 12,000 at the beginning of the week to $ 12,200. This pivotal position offered an opportunity for the bears to retreat and BTC to surpass $ 12,500 and rise to $ 13,000 by the weekend. However, when the trade day began in the US, the stock market bulls had a strong opening. While stocks had a strong start, crypto investors shook and led to a sudden collapse.
Economic data, especially the decrease in unemployment figures, new developments around the 2nd stimulus package and improvement in US-China trade relations are observed. The long-lasting gloomy economic climate in the US looks set to change as investors take the lead and drive stocks up. The S&P 500 broke an intraday record at 3393.52 on Tuesday morning. This indicates that the highest level of February 19, 3386.15, was passed.
Markets Behave Against Logic
But again, as several key analysts have pointed out, the continued positive performance of stock markets runs counter to any economic logic.
Bitcoin advocate Anthony Pompliano commented on the high S&P 500 record. In a tweet, he reminded his followers that just a few months ago the US launched an ATH quantitative easing policy and now a new S&P 500 is at an all-time high. These developments show that what happened is not a coincidence.
The US has made it clear, through the FED, that it will do everything in its power to help the government, the economy and the stock markets escape the economic impact of the pandemic. As one of the ways to do this, the United States has chosen the way of Quantitative expansion, which is simply to print and release more money. By purchasing large-scale assets, demand remains high and prices remain. In extreme cases, this can trigger FOMO or excitement around certain assets and we may see prices rocket.
Bitcoin (BTC): The First and the Last
However, this is an obvious manipulation and has dire consequences. More money means devaluation and long-term inflation. This also means a rising national debt, and the US currently owns over $ 26 trillion. When the effects of all this begin to emerge, the first place to collapse will be the stock markets, as seen in 2008. So although these markets seem strong now, their crashes are very close.
On the other hand, Bitcoin is not only robust in quantitative tightening, but also a safe haven in times of economic or political crisis.
Since falling below $ 12,000, the best digital asset has remained below a strong resistance of $ 11,800. With the recent bull trend derailment, there are some buying hesitations among investors. Further declines are expected unless the highest level is retested in the short term.