Bitcoin price has recovered from $ 3,600 to more than $ 5,200 – recording a 44% recovery in just a few hours. This rebound of BTC coincided with the 900 points increase of the Dow Jones stock index (DOW).
After plummeting 9.99% in a single trading session, the DOW index has penetrated deeply into the territory of the bear market (bearish market). This index has witnessed a record high sell-off since 1987, making the global financial market sentiment extremely confusing.
In response to the general discount movement, Bitcoin plunged to as low as $ 3,596 on some cryptocurrency exchanges such as BitMEX, when the cryptocurrency market recorded the largest loss in seven years.
Dow Jones is giving Bitcoin a “life buoy”
Throughout the week, Bitcoin and other high-risk assets have consistently followed the trend of the DOW index and global stock markets.
When a massive sell-off occurred in the financial markets, the price of Bitcoin also began to fall free, to the point that some trading platforms with billions of dollars of daily processing also had problems.
The rapid recovery of the Dow Jones after the worst day since 1987 has significantly reduced the pressure on risky assets, including Bitcoin.
A famous cryptocurrency trader said:
"The stock market will see a relief rally and a more stable trading day. This weekend there may be more fiscal policies from countries, through which we can find short-term relief in the markets as a whole. BTC will test some higher levels and so does altcoin. "
Within the past two days, the Bitcoin price has dropped by almost 50% and hovering in the oversold area.
Will Bitcoin have enough momentum to recover to a critical level?
Historically, Bitcoin has escaped the bear market cycle with the help of fake people taking Bitcoin prices to key resistance levels.
Finally, when the natural rally responds to real demand from retail traders and institutional investors, several levels of FOMO appear, and make Bitcoin enter an uptrend.
The problem with Bitcoin in the current context is that it is still unclear whether there is enough desire from retail investors to invest in cryptocurrencies even if Bitcoin price starts to increase sharply in the near future.
When a rally is not accompanied by a large influx of fiat cash flow and a large increase in the spot market, then it often leads to a severe sell-off.
As such, Bitcoin wants to witness a sustained recovery throughout the coming months, then the stability in the US stock market and the strong recovery of the DOW index may be the most important factor.
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According to CryptoSlate
Translated by ToiYeuBitcoin