Bitcoin edged higher on Tuesday as stock markets cheered the European Union’s decision to approve a landmark coronavirus recovery fund.
- The leading cryptocurrency by market value jumped from $9,190 to $9,360 during the 60 minutes to 08:00 UTC.
- Bitcoin is trading at $9,348 at press time – up around 2% on the day, according to CoinDesk’s Bitcoin Price Index.
- European Union leaders clinched the long-awaited €750 billion post-pandemic fiscal stimulus plan during the Asian trading hours, boosting demand for equities and sending EUR/USD to a 4.5-month high of 1.1470.
- Additional bullish pressure looks to be stemming from hopes that coronavirus vaccines would be ready by the year-end.
- Some major European equity indices are up at least 1.5% each, while Germany’s DAX index is currently at its highest level since February.
- Asian stocks also gained over 2% early Tuesday; futures tied to the S&P 500, Wall Street’s benchmark index, are currently up nearly 0.8%.
Looking forward
- Bitcoin has recently developed a strong positive correlation with the stock markets.
- Equities remain vulnerable to a potential escalation in lingering Sino-U.S. tensions.
- Wayne Chen, CEO of Interlapse Technologies, however, said investors may now look to bitcoin as a store of value/safe haven, given the high price of gold.
- The precious metal is now just 4.6% short of the record high of $1,911 reached in September 2011.
- From a technical analysis standpoint, bitcoin’s immediate bias remains neutral, despite today's rise.
- The cryptocurrency is still trapped within the narrowing Bollinger volatility bands.
- A Bollinger breakout in either direction would bring a measured move of $400 to support at $8,600 or resistance at $9,800, as noted by Adrian Zdunczyk, CEO of trading community The BIRB Nest in a blog post.
Disclosure: The author holds no cryptocurrency at the time of writing.