The crypto markets are riding high as buyers push the price of bitcoin up through the $7,000 level.
This bullish price action comes as the perfect macroeconomic storm is brewing: The same monetary policies that irked Satoshi Nakamoto enough to create Bitcoin—bailouts and quantitative easing—are now going into overdrive, just as bitcoin’s deflationary May Halving event begins to loom on the short-term horizon.
As the first quarter of 2020 quarter closed, bitcoin clocked 6% losses. This outperforms the S&P 500’s 23% decline, but falls behind gold’s 3% quarterly gains. All of these assets however, were left in the dust by surging privacy coins.
This Week’s Highlights
- Privacy Coins Outshine Bitcoin
- Institutional Traders Return to Crypto
Privacy Coins Outshine Bitcoin
Dash and Zcash are both firmly in the green for 2020 so far. Zcash increased 20% against the U.S. dollar in the first quarter, and Dash is up 69% over the same period.
Both these privacy-focused coins may be benefiting from concerns over coronavirus-induced technological surveillance, with governments around the world turning to citizen-tracking solutions to prevent the virus from spreading.
Dash could also be reacting to a 562% surge in active users of its Android wallet, which some put down to increased adoption in inflation-stricken Venezuela.
Institutional Volume Spikes
Institutional Bitcoin traders are returning to the market, according to data from Skew.
Trading volumes on two major institutional platforms—CME and Bakkt—spiked on Thursday April 2nd as price pushed up to the yearly open at $7,000. CME posted $347 million in Futures volume, and Bakkt almost $20 million. Such high levels of trading activity have not been seen since the week of “Black Thursday” 13th when the global run to cash led bitcoin off a cliff.
The Week Ahead
The dreaded COVID-19 is likely to be the biggest catalyst of price action in the week ahead. New figures, vaccine developments, and cash injections to revive the economy could all potentially ripple out from traditional markets to catalyze movement in cryptocurrency.
Any positive momentum is likely to face a wall of sellers around the $7,000 level, which has acted as key resistance over the past week.
In the altcoin world, the hard fork of Bitcoin—Bitcoin Cash— is due for its own Halving during Passover on Wednesday April 8th. This technical network event is usually thought to be bullish because it effectively reduces supply.