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Crypto Market Has Come to a Stand-Still as the Pandemic Rages On

In Shakespeare’s romantic comedy “Much Ado About Nothing,” Don Pedro, says, “Why, what’s the matter, that you have such a February face, so full of frost, of storm and cloudiness.” For Bitcoin traders though, what they wouldn’t have given for a February face, with the past week proving to be, well really, much ado about nothing.

As a record stimulus package was bounced through the Houses of Congress in Washington, markets gyrated wildly, flipping between bull and bear at the drop of a hat, almost as if they were cryptocurrency markets.

And as for cryptocurrency markets? The past week has seen about 17% volatility peak-to-trough, which for all intents and purposes would attract no more than a yawn from your seasoned Bitcoin trader. There were no sustained pushes upwards or downwards. With small dips and sidewards trading, Bitcoin started the week at just below the US$6,000 mark, around US$5,900 and has ended the week up at about US$6,200.

And the reality is that volatility is already priced into markets. Because the coronavirus situation has demonstrated too many unknowable unknowns. Markets are no longer reliable barometers of economic portends. The world is sort of in limbo, with large swathes of the global population in some form of lockdown and with economic activity in purgatory.

Governments and central bankers have proved that they will go to any length to sustain economic activity and to prop up their economies – this is good, because more liquidity will be in search of more investable assets. And with stock markets acting more like shock markets, an ever-increasing corporate debt tsunami, suddenly a bet on crypto may not seem as ludicrous after all.

Looking forward over the next week, what are the bright spots?

Bitcoin is unlikely to push beyond the US$7,000 resistance and even before that level, there is strong resistance at the US$6,500 and US$6,700 levels. It Bitcoin stays above US$6,700 for more than a few days, there is a chance it will test the US$7,000 level but be careful of the pullback.

Expect continued weakness and sidewards trading for Ethereum as the world’s second-favorite cryptocurrency searches for direction. Current correlation models suggest that ETH is responding more slowly (time lag series) against Bitcoin – so traders with the right tools can capitalize on this arbitrage trade.

What about bright spots? We see value in Bitcoin SV (BSV) again at the US$130 level, with an exit at US$180. At current levels, a small trade at US$150 and exit again at US$180 could be considered for the risktakers.

Binance Coin is overpriced at US$12 and short traders could consider a short down to about US$10, for a quick scalp.
As always, stay safe and healthy and good luck.

You may also want to read: BTC or USD: Which Currency Does The World Need in Time of Crisis?

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in blockchain, crypto, Web3, fintech and technology.

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© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

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