How has COVID-19 affected Bitcoin?
Today is the beginning of a new month and a new quarter. However, will the markets be able to recover after the first quarter’s severe blow from the Coronavirus?
While global stock markets posted major losses in the quarter, Bitcoin fell just 10.83%. The sharp decline of 24.9% in March actually reversed gains from the beginning of the year. But once it reached its three-month low, Bitcoin was able to advance by 75% in two weeks in a highly volatile period. This was despite the intervention of central banks on a scale never seen before in history.
At current levels, BTC/USD is only $ 700 below its position at the start of 2020 and $ 3,800 below its current annual high of about 10,300. That’s why Bitcoin now looks more and more -sustainable as an investment asset against traditional markets that are still struggling with significant losses as a result of COVID-19.
Statistically, the second quarter in a given year is usually the most profitable for Bitcoin holders. Since 2013, only once Q2 has yielded a negative return, with average gains totaling 65%. Still, the major cryptocurrency would have to break above $ 10,000 to form a new short-term bullish trend. Until then, the short-term bearish trend, formed since June 2019, remains intact.
How did the rest of the cryptocurrencies end the quarter?
As for the rest of the crypto market, major altcoins followed Bitcoin and most ended the quarter in the red territory. However, there were also cryptocurrencies that managed to end up on the green. Despite seeing a sell-off for the period, Ethereum gained 3.53% in the first quarter.
However, Ripple’s XRP dropped a total of 9.87%. EOS ended the quarter with a loss of 14.45% and Stellar’s Lumen finished down by 9.36%. Litecoin experienced a 32.58% crash in the highly bearish month of March. Thus, the sale-off wiped out profits from the beginning of the year and Litecoin closed Q1 with a decline of 4.72%.
Litecoin will only progress to a greater recovery if it breaks above $ 40
LTC/USD traded slightly up yesterday, rising from $ 38.44 to $ 39.30. Looking at the hourly chart, Litecoin consolidates into a big triangle. Currently, the price is trying to move towards the upper boundary of the triangle as purchase volumes increase. Also upside sign is that the price is trading above the 100-day moving average on the hourly chart.
The key resistance zone is the psychological level 40. If the Litecoin bulls manage to break through it, this should confirm the further upside momentum to the next targets at $ 43.45 and $ 45.
The bullish price action is also supported by RSI after recovering from its low levels on a daily chart. And while the RSI is targeting level 45, the $ 50 resistance is likely to be a springboard for the next rally to $ 60.
Meanwhile, the closest support is $ 37, followed by $ 34.50, $ 28 and $ 26.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin, or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.