Bitcoin traders have two reasons to be happy in the second week of May. First of all, the Bitcoin halving event has attracted interest in the token as miners rush to complete as many transaction as they can before their rewards are cut by 50%, so the blockchain network is running very smoothly. Second, Bitcoin is solidifying its status as a flight-to-safety asset at a time when Wall Street appears to be heading towards another bearish correction.
The world's most valuable cryptocurrency started off the year 2020 with a nice and gradual rally that pushed it back to the highly psychological price level of $10,000. In mid-February, some analysts were hoping to see BTC/USD building a resistance at the $10K mark, and the more bullish traders were hoping to see a push towards $12,000 with moderate volatility; alas, the coronavirus pandemic shattered those hopes. Investors who thought BTC would be a hedge against the precipitous crash of the market were left hanging as virtually all commodities fell along with the stock market.
Bitcoin bulls were rejoiced to see a rally materializing in mid-March. Even though volatility still rules in the cryptocurrency markets, the push back towards $10K has been more stable compared to previous rallies. Aside from the halving, there really aren't many positive fundamental news to support the current rally, but technical charts and trading volumes indicate that the next resistance level will build around $10K; this is based on the support seen on May 6, when BTC/USD traded as high as $9,380 before pulling back to $9,126.
The optimism is high among many Bitcoin traders who are not ready to rake in profits yet. Analysts feel that the rally has legs, and they are also looking at other investment commodities such as gold, which is enjoying a considerable rally as well.
It may be hard to believe that some investors are currently looking at Bitcoin as an asset similar to gold, but this seems to be the case because Wall Street has entered a period of deep uncertainty. As long as economic reports keep posting negative forecasts, there will likely be enough enthusiasm to keep BTC going.