Uncertainty Remains
A vaccine that effectively cures coronavirus expects to remove the necessity of social distancing. Therefore, it allows the sectors that rely on close physical interactions — airlines, travel, manufacturing, entertainment, etc. — to return to normal. The global economy has a better probability of rebounding faster as long as there is a shot available to curb COVID-19.A working vaccine also allows investors to reduce their appetite for riskier assets. It is the same reason why Gold, a safe-haven rival to Bitcoin, recorded its worst single-day decline on the day Pfizer claimed a successful trial. There was not a Stan Druckenmiller to save the precious metal.
Bitcoin is attempting to hold a price floor above $16,000. Source:
Meanwhile, questions remain about the vaccine’s efficacy, cost, and distribution. The slower it reaches the people, the higher is the probability of investors to keep their one leg in safe-havens like gold and Bitcoin. The prospect of more stimulus from governments also makes them want to hold speculative assets over non-yielding cash or cash-based alternatives.
The Bitcoin market could expect to correct lower in the short-term as traders prepare their interim bearish positions against the vaccine outlook. Nevertheless, those with a long-term risk appetite could find the next dips as their opportunity to expand their cryptocurrency stocks.
Bitcoin Technical Outlook
The BTC/USD exchange rate is inside an overbought territory on its daily chart, thus bringing up another reason why the pair should correct lower — or at least, consolidate sideways above $16,000. Meanwhile, on a four-hour chart, BTC/USD is showing a bearish divergence.
Bitcoin shows bearish divergence on short-term charts. Source:
That further amounts to a downside correction in addition to the said fundamentals and technicals above. But, according to Konstantin Anissimov, Executive Director at CEX.IO, the next big bearish move may take another two-three weeks to arrive. Excerpts from his statement to NewsBTC:
Bitcoin was trading at $16,320 at press time, up more than 2 percent into the Monday session.“It seems like BTC is poised for higher highs from a technical perspective. The Tom Demark (TD) Sequential indicator suggests that the cryptocurrency may continue to rise for another two to three weeks before a sell signal emerges. If this is the case, Bitcoin could rise to $19,000.”
