Bitcoin has formed a golden cross signaling a possible extension of the bullish run. Meanwhile, Stocks in mainland China plummeted more than 8% on Monday as they returned to trade following an extended holiday amid an ongoing coronavirus outbreak.
February 3, 2020, | AtoZ Markets – It is most likely that Bitcoin will benefit from a rapid drop in Asian stock markets as a result of the coronavirus menace. Crypto analysts believe that the flagship cryptocurrency will gain soon.
Chinese stock market plunges 8% on coronavirus fears
As per the data obtained from Coin360, Bitcoin is already making swift gains on February 3. The crypto surged to highs of $9,580 overnight before a slight downward correction to $9,350.
At the same time, the Shanghai Composite Index (SSE) opened the day down by around 8% as the fears over the economic effect of coronavirus continue to escalate. Authorities have faced heavy criticism for the way they handled the outbreak. In that context, China’s central bank injected a huge lump sum of capital into the local market totaling 1.2 trillion yuan ($170.9 billion).
This is the equivalent of the entire market capitalization of Bitcoin, or $174 billion. The monetary madness has not gone unnoticed by crypto enthusiasts and analysts.
China's central bank will inject the equivalent of 21,000,000 bitcoin into their markets tomorrow.— Rhythm (@Rhythmtrader) February 2, 2020
1.2 trillion yuan = $174 billion = bitcoin's entire market cap
Everything is fine. 🙃
Is China coronavirus fears inspiring Bitcoin purchases?
In the meantime, Bitcoin’s 24-hour gains remained flat. Nevertheless, the anticipation in the market is still high on the back of monthly gains that have neared 35%. One analyst said on Twitter that a very volatile week has now started for the equity markets. According to this analyst, he expects that the impact will increase when the European markets open several hours later.
At the moment, most analysts have mixed opinions over the extent to which the coronavirus is impacting Bitcoin price. According to trading personality Tone Vays, any severe escalation of the coronavirus may result in an adverse effect, although for now, it is helping the flagship token.
The managing partner at blockchain investment firm Kenetic Capital, Jehan Chu, said on February 3:
“As trust in global institutions and markets continues to deteriorate, we will see highly mobile digital assets like Bitcoin explode in value.”
Bitcoin was already showing bullish signals before the recent events. The technical fundamentals continue to set new records as institutional interest in various products like Bitcoin futures continued to explode.
This week, it is evident that another factor was gaining attention – a golden cross. Bitcoin’s 50 and 100-day moving averages appear ready to cross over in what has always been seen as a bullish signal for the investors.
The last time this occurred was in April of 2019 when BTC was priced at around $4,500. Following a golden cross signal, prices surged to a yearly high of $13,800 in June. This has also been observed by analysts using different moving averages on the weekly time frame:
Wow. Bitcoin is about to print a Weekly Golden Cross next week, after 10 months.— Anondran (@AnondranCrypto) February 3, 2020
If Bitcoin were to do the same $4000 to $14000 rally this time its going straight to $30000.
I'm so hyped for this! pic.twitter.com/UIS0wpQIyb
Top altcoins continue to gain
As the week started, the altcoins have shown signs of growth. Most of the top altcoins have gained by around 1%. Ether, at some point, posted a 1.8% daily growth while XRP managed 4.7%, and Tezos gained 8.9%.
The cumulative crypto market cap was at over $261 billion, with Bitcoin’s dominance standing at 65.3%.
Will China’s economic woes affect Bitcoin prices? Let us know what you think in the comment section below!