Gold, a symbol of riches and monetary stability at least since the Sumerians civilized Mesopotamia, is up just 13% in 2020. And the Standard & Poor’s 500 Index of U.S. stocks is still negative on the year, down 9%.
Bitcoin has lagged gold this year as investors looked for hedges against inflation – especially with the Federal Reserve creating trillions of dollars of fresh money to offset the devastating economic and market toll of the coronavirus.
BTC: Price: $8,8783 (BPI) | 24-Hr High: $9,469 | 24-Hr Low: $8,111
Trend: Bitcoin has pulled back from two-month highs above $9,400 hit early on Thursday, confirming signs of buyer exhaustion on the intraday technical charts.
The hourly chart is now reporting a bearish divergence of the relative strength index (RSI), which occurs when an indicator forms a lower high, contradicting a higher high on price.
Further, the current 4-hour candle is flashing red and validating the preceding spinning top candle – signaling a weakening of upward momentum.
As a result, the cryptocurrency may consolidate for the next day or so. That said, most analysts expect bitcoin to continue rising toward $10,000 ahead of the mining reward halving, scheduled to take effect on May 12.
“While bitcoin miners are choosing to hold, the number of actual participants in the market is hitting new highs amid the expectation that this halving event will play out like the last one and push the price up sharply,” said Simon Peters, an analyst and crypto asset expert at investment platform eToro. “With these tailwinds in place, we think it is likely the price will go above $10,000 before the halving actually takes place.”
From a technical standpoint, the probability of bitcoin testing five figures in the next 12 days would weaken if the spot price finds acceptance under the 200-day average at $8,000.