Buoyed by an overall change in risk sentiment, cryptocurrencies surged on Thursday, with Bitcoin exceeding $7,500 for the first time since crashing in early March.
Bitcoin climbed as much as 9.1 percent to trade at $7,556 As of 12:18 p.m. in New York, while the Bloomberg Galaxy Crypto Index – that tracks some of the largest digital assets – climbed up to 6.3%. Bitcoin tumbled 27 percent on March 12 as the widening coronavirus pandemic pummeled financial markets.
With the token nearing the top of its recent trading range, it might have sufficient momentum to break above the $8,000 level, says Ed Moya, a market analyst at Oanda Corp.
“Bitcoin is Beginning to attract retail attention again,” Moya wrote in a note. “With worldwide stimulation efforts showing no signs of easing, some dealers are leaping into cryptos as a hedge against foreign exchange.”
Cryptocurrencies have largely moved together with riskier assets over the last month, decreasing when equities come under stress and increasing when they gain. Stocks rose on Thursday on the back of optimism that portions of the U.S. market might begin to open shortly and petroleum rallying, with the S&P 500 on pace for its best month since October 2011.
Technical indicators imply Bitcoin needs to break above $8,000 To begin a run higher. Additionally, with the 14-day Relative Strength Index (RSI) in 59, it has not entered the overbought territory. Assets are considered overbought if the RSI surpasses 70. A break lower could mean Bitcoin drops to about $6,500, another significant level of support.
Bitcoin was “seemingly magnetized by a previous resistance zone around $7,500 level,” said Denis Vinokourov, head of research at Bequant, a London-based digital asset company. “This significant bullish bias Encouraged leveraged money to reunite.”