Bitcoin hit a bull’s eye ahead of the New York opening bell Thursday as its price closed above $16,000.
The flagship cryptocurrency did not extend its welcome, falling prey to a moderate selling bias that led it back below $16,000. Nevertheless, it found a concrete support level above $15,550, from where it attempted another bull run towards the same psychological resistance.
It reclaimed the $16,000 level all over again as of 0700 EST.
Risk Appetite Wanes, Bitcoin Gains
On a broader scale, the Bitcoin’s latest upside move came as the US dollar weakened and the ongoing rally in the global equity markets paused. So it appears, traders’ shift moved backed to safe-haven/hedging assets against the backdrop of a rising number of coronavirus infections that led some US states to introduce fresh lockdowns.
For instance, the US stock futures slipped in the pre-session trading Thursday, with the S&P 500 edging down by as much as 0.3 percent. Meanwhile, gold futures rose, confirming that investors are grappling with the potential economic blow the new COVID-19 can cause.
The conditions were somewhat brighter at the beginning of this week. Drugmaker Pfizer and its partner BioNTech announced that their experimental coronavirus vaccine showed a 90 percent success in treating volunteers during the trial. That allowed the US stocks to grow higher through the revival of “pandemic losers” from airlines and the hospitality industry.
At the same time, pandemic winners like tech stocks and gold slipped. Bitcoin also suffered but managed to avoid a deeper retracement after billionaire investor Stan Druckenmiller’s endorsement (read here).
A bet against #bitcoin is also a bet against legendary investors Paul Tudor Jones, Cathie Wood, Bill Miller,
Chamath Palihapitiya, and Stan Druckenmiller.
That is a bet you lose every time.
— Lark Davis (@TheCryptoLark) November 11, 2020
The demand for Bitcoin sustained at local support levels also as global bond yields continued to return meager profits. Even with a recent rebound, the yield on the benchmark 10-year US Treasury note was below 1 percent. That ensures that investors stay glued or year-to-date winners like gold and Bitcoin.
Expectations of another price rally also appeared as investors lost confidence in the vaccine news. Some gold analysts confirmed that they expect safe-haven demand to grow on uncertainty over how long the vaccine would take to reach the people.
Meanwhile, the long-term inflation outlook caused by the ultra-low interest rates and unlimited quantitative easing would keep the appetite for assets like gold and bitcoin higher.