Within the past day, the price of Bitcoin (BTC) increased and reached a high for the day at $5,940. This is a strong move for BTC, allowing the price to finally break out of a tight window of $5,070 to $5,520 that it was stuck in for some time. Although this daily high was celebrated, it seems that the price is starting to go back below its prior trading range at the time this piece is being written.
This unforeseen surge in the value of Bitcoin came right after it was reported that the U.S. Federal Reserve was going to slash interest rates to nearly 0%, launching an easing program worth $700 billion. The regulating body also offered some additional specifics about what type of securities would be purchased.
This unprecedented stimulus package was designed to offer some alleviation to the problems being faced by the Coronavirus outbreak. The U.S. economy, and the entire world economy for that matter, has seen insane drops that are making even the most seasoned traders sweat. Unsurprisingly, Dow futures saw a drop of 1,000 points shortly following the major announcement. This drop could be signaling that, come Monday, the S&P 500, the Dow, and other indices might end up giving back the increases that were seen once the market closed on Friday.
This major pullback suggests that investors are incredibly worried about long term damages being caused by Coronavirus and government responses around the world. Despite the major Federal intervention, it seems as though investors concerned about how self-quarantines, major airline disruption, travel delays, and border closings will impact their investments. With millions of people being forced to remain inside, its no wonder that investors are getting increasingly worried.
It appears that the initial surge seen by BTC might just be a quick and short-lived reaction to some positive news that ended up having no longterm positive impact.
Prices of Altcoin also increased due to the announcement from the Federal Reserve. Ethereum Classic grew by 3.47% while Bitcoin Cash added 6.63%. XRP increased by 3.47%.
The cap for the cryptocurrency market is now at $1.54.7 billion with the dominance rate of Bitcoin standing at 63.9%