The total value of the cryptocurrency market has increased by $ 20 billion in just one day. During this period, Bitcoin price saw $ 7,400 and some alternative cryptocurrencies gained more than 20%.
This increase in the market has brought a lot of money to many investors. Especially those who invested in altcoins like ETH made more than 15% gain in just one day.
Investors have benefited from this rise in the market, but many people have started to suspect this mobility in the market. As we mentioned in an article we shared today, many analysts say that this mobility does not give any confidence, saying that it is not enough volume in the market right now.
Until a few days ago, many crypto commentators predicted that the price of Bitcoin could decline to 5,200 dollars. However, Bitcoin twice exceeded the 7 thousand dollar threshold surprised many people.
When we look at the charts, we see that there is not much increase in the trade volume of Bitcoin. However, there is still a few hundred dollar increase in Bitcoin price. People are very disturbed by this inconsistency.
There is Correlation
As it can be seen that the bitcoin price is rising despite the insufficient volume, it surprises many people. It is not possible to give an exact answer to the question of why Bitcoin is rising right now. But there is a hint that can help us answer this question, even if it is not certain.
At the moment, when we open and look at the Bitcoin chart, we see a rapidly rising product despite the lack of volume. When we look at this chart alone, it is quite difficult to understand what the rise in price is due to. But when we look at a different graphic, we have a clue.
Just looking at the Bitcoin chart, it’s hard to make sense of this rise, yes. But when we put the Bitcoin chart and the S & P500 chart in a row, we see an interesting picture.
Why is S & P500 Rising?
As we said, it may not be possible to answer the question of “Why is Bitcoin rising?” However, considering the correlation above, we can ask “Why is the S & P500 rising?” It is possible to answer this question.
The S & P500 saw one of the lowest levels in history a few weeks ago because of the coronavirus. But the US stock exchange started to gather itself a little this week. We can see the same in the BIST100 Index.
If we talk about the information at hand, there is only one reason for the increase in the S & P500 Index: The markets have started to hope again. While the total number of Kovid-19 cases in the USA continues to increase rapidly, the number of those who died from coronavirus has exceeded 10 thousand. But New York Governor Andrew Cuomo gave good news the other day.
Governor Cuomo said that although the number of cases in New York continues to increase, the death rate is no longer increasing and this is a good development. This explanation of Cuomo may give hope to the markets again because people think that the peak may have been seen in coronavirus deaths.
With the investors hoping again, the S & P500 has taken action and apparently Bitcoin has started to rise in line with the S & P500. If there is a connection between Bitcoin and S & P500 traders, it may be possible to say that these traders are fueling both markets at the same time. However, it is difficult to say anything definite about this yet. Obviously, considering that the volume of Bitcoin is low, there is no ‘blower’ situation.
If the Bitcoin price continues to move in line with the S & P500, a drop in the S & P500 Index may trigger a big drop in the Bitcoin price. But it is of course difficult to predict exactly when this decline will occur.