It is most likely that Bitcoin will benefit from a rapid drop in Asian stock markets as a result of the coronavirus menace. Crypto analysts believe that the flagship token will gain soon.
Stock Markets Are Weak
Data obtained from Coin360 showed that BTC is already making swift gains on February 3. The token spiked to highs of $9,580 overnight before a slight correction took it back to $9,350. Concurrently, the Shanghai Composite Index, or SSE, opened the day down by around 8% as the fears over the economic effect of coronavirus continue to escalate.
Authorities have faced heavy criticism for the way they handled the outbreak. In that context, China’s central bank injected a huge lump sum of capital into the local market totalling 1.2 trillion yuan ($170.9 billion).
Currently, Bitcoin’s 24-hour gains remained flat, but the anticipation in the market is still high on the back of monthly gains that have neared 35%. One analyst said on Twitter that a very volatile week has now started for the equity markets. According to this analyst, he expects that the impact will increase when the European markets open several hours later.
For now, most analysts have mixed opinions over the extent to which the deadly coronavirus is “helping” or “hindering” Bitcoin price action. According to trading personality Tone Vays, any severe escalation of the coronavirus may result in an adverse effect, although for now, it is helping the flagship token.
The managing partner at blockchain investment firm Kenetic Capital, Jehan Chu, said on February 3:
“As trust in global institutions and markets continues to deteriorate, we will see highly mobile digital assets like Bitcoin explode in value.”
Bitcoin was already showing bullish signals before the recent events. The technical fundamentals continue to set new records as institutional interest in various products like Bitcoin futures continued to explode.
This week, it is evident that another factor was gaining attention – Bitcoin’s 50 and 100-day moving averages appear ready to cross over in what has always been seen as a bullish signal for the investors.
As the week started, the altcoins have shown signs of growth. Most of the top altcoins have gained by around 1%. Ether, at some point, posted a 1.8% daily growth while XRP managed 4.7%, and Tezos gained 8.9%.
The cumulative crypto market cap was at over $261 billion, with Bitcoin’s dominance standing at 65.3%.