Do COVID-19 Cases Work As A Bitcoin Trading Signal?
Bitcoin trading signals can come from anywhere. It could range from just looking at charts to looking at how people react towards the purchase of certain assets. With the pandemic sending most of the world into lockdown, COVID-19 has now made its way into being a trading signal. The movement of the market in line with the rise and fall of COVID-19 cases has shown some interesting correlations when both charts are compared.
The COVID-19 pandemic has no doubt had a huge impact on every single financial market. Bitcoin has not been left out of this. The lockdowns of 2020 had markets apprehensive of impending crashes coming. And for a while, it was right. Market prices crashed as the world tried to figure out its way out of the pandemic. But once countries began to find their footing, the markets recovered in a way no one had anticipated.
But a more interesting point is the price of bitcoin rallying according to flare-ups in COVID-19 cases. The times where there have been the most COVID-19 cases have also seen the price of BTC rise in tandem with it. An example of this is when Bitcoin hit a new all-time high of $64K in May. During this same time period, the world had recorded the highest number of COVID-19 cases ever since the pandemic first broke out.
BTC price went up as COVID-19 cases rose | Source: Twitter
As the number of cases began to die down, so did the price of BTC begin its downtrend. This lasted for a couple of months following May when COVID-19 cases had begun to decline. The price of BTC hit its lowest point in a two-month period following COVID-19 cases hitting a low point in June.
Bitcoin Keeps Climbing With COVID-19 Cases
While Bitcoin price remained low for most of June and July, August has seen a bull rally that has sent the price of the digital asset skyrocketing again. This is attributed to mounting buy sentiment in the market. Although a comparison with the chart of COVID-19 cases shows conspicuous similarities in both charts. Number of COVID-19 cases had also begun to climb at this point. A new strain had emerged in India that had ravaged the country. This was the reason why Ethereum co-founder Vitalik Buterin had sent over $1 billion in donations to an Indian COVID relief fund.
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Presently, the price of BTC is up, notwithstanding the dip, maintaining the same movement patterns as COVID-19 cases worldwide. An important factor tying the two would be the stimulus checks being given to citizens. When countries went into lockdown due to the pandemic, countries had resorted to paying citizens who could not work to keep them afloat.
Once these checks landed, it gave people more disposable income as a lot of things like the rent was put on hold in many jurisdictions. A lot of individuals getting these checks had used them to invest in financial markets like stocks and bitcoin. This contributed to the increase in the price of the digital asset.
COVID-19 is still raging on in some countries. Some are set to go into lockdown again after coming out of the previous ones due to an increase in cases. If the pattern holds, then this wave of COVID-19 cases will see the price of bitcoin going higher again.
Featured image from The Economic Times, charts from Twitter and TradingView.com