The price of Bitcoin (BTC) has not been stable for a couple of weeks, but it has been increasing drastically. The weekend saw the price of BTC go down in a correction effort but recovered on May 5. The price crossed above the $9k mark again, which was experienced the last week before the weekend dip. On Sunday 3rd, the price corrected to $8500 but quickly rebounded and settled between $8700 and $8850. The price increase on May 5th was more than a 4% increase.
Covid-19 Economic Effects
The recovery of BTC to its previous trading price has happened when the United States Centre for Disease Control and Prevention expects a rise in infection rates for Covid-19 to cause around 134000 deaths in U.S. by June 1st. Amidst this news, many states have executed plans for citizens to go back to work to try revive the failing economy. In addition to this, The Treasury Department announced plans to borrow another $3 trillion this quarter, making the total U.S. debt edge closer to $25 trillion.
The increase in Covid-19 cases resulted in many businesses closing down due to the work from home call to reduce the spread of the virus. Closure of businesses, public gatherings and events have had negative economic effects on businesses and families. As a result, more than 30 million Americans have filled for unemployment. The government designed a program to provide financial support to small business but the allocated funds were expended within the first few days.
With these negative factors in the traditional market, the expectation is that the crypto market would be affected negatively, which has not been the case with Bitcoin given the price increase. This price increase could trigger more people to trade BTC in an effort to benefit from the speculation created by the BTC halving expected in a few days. If this happens, the price will keep increasing, surpassing previously speculated ranges.
Bitcoin Targets $9500
The price ranges for the last couple of hours are between $8700 and $8900. An hourly period range indicates that the price has gone above the $9100 range but soon dropped to $8900. In order to maintain an upward slope, this price needs to go above the resistance range, allowing it to go beyond $9200. With this price, traders will target between $9400 and $9600. At the moment, traders should be focused on the volume of trades to see if the momentum wanes and the price drops below the $8800 mark, or whether it will rise above the resistance zone from $9100-$9200. If this happens, then the upward slope can continue through the week.