Bitcoin (BTC) price dropped more than 6% after hitting $ 12,486, the highest value of the year according to their own statistics. After this decline, in the minds of both investors and those interested in the market, “Is Bitcoin entering the bear market?” questions began to turn.
After falling back on the bullish rally and trading at the $ 11,600 band, Bitcoin has prompted market analysts and investors to wonder whether the decline will continue. This decline of more than 6% is due to the daily profit selling among traders. When the BTC price displayed such an upward performance, daily investors who wanted to make a profit in the short term sold their Bitcoins and caused the BTC price to fall even in such a bullish rally.
Market analyst Kevin Svenson explained that he finds this retracement illustrated by the BTC chart misleading. Svenson thinks that BTC will recover even if the Bitcoin price falls below the $ 12,000 band, and the basis for this is the American stock market. Commenting on the snapshot of Bitcoin, Svenson says:
“The situation seems to be in favor of the bulls. Calm down! If the S&P 500 index breaks a record, the cryptocurrency market will reignite ”
Seeing the Big Picture
Bitcoin increased in proportion to the unexpected rise of the S&P 500 index in the second quarter of the year. In the US, the S&P 500 index rose sharply on Tuesday, due to the large increase in technology stocks. But to look at the bigger picture, this high close in the S&P 500 is also closely linked to the record rise for the Federal Reserve.
It is said that the government, backed by the Central Bank, has injected trillions of dollars behind this turbulent rally in the US stock markets. At the same time, the US government promised unlimited liquidity to reduce the impact of the pandemic on the economy, while the Fed implemented a plan to keep interest rates close to zero. And then 10-year treasury reserves saw record low rates, according to Fed index data. This negative picture drawn in the US economy pushed investors to sources they find more reliable. The fact that investors relied on this reliable resource need on gold and Bitcoin led these two assets to draw a chart in correlation.
“Bitcoin’s Ascension Rally Will Continue”
Kevin Svenson predicts that Bitcoin, which he thinks will show a similar move to the S&P 500 index, will remain in the bull market. Svenson said that the environment for both Bitcoin and the S&P 500 index to continue to rise is still ready.
At the same time, treasury yields and the dollar’s low level in the last 2 years create an even more favorable environment for cash investors to seek alternative safe ports. In the light of all these developments, gold broke the record at the beginning of last week by crossing the 2 thousand dollar band on an ounce basis and Bitcoin rose to 12 thousand dollars. Svenson said that the Fed’s near-zero interest rate policy continues and could prepare new stimulus packages if needed….