Bitcoin crosses $10,000 thanks to increased demand for hedging against coronavirus

The crypto market led by Bitcoin has returned to decline, after it managed to receive a strong push higher that made it break the psychological support level of $ 10,000 but failed to hold it as a support level, to return again to the level of $ 9,700.

On Sunday, the price of bitcoin suddenly rose by more than 4%, surpassing $10,000 for the first time since September 22, 2019, bringing the total market capitalization to $184.26 billion. Lows of $6,400 at the end of 2019.

Many are wondering why investors are rushing to buy bitcoin, is it a hedge against the risks of the new Corona virus outbreak or investors' fears XM Arabia Who missed out on the next bitcoin halving due to expectations of broad bitcoin gains, or both?

It is impossible to say that one of these two factors had the greatest impact on the price of Bitcoin, because we cannot deny the daily reports issued from China about the negative effects on the Chinese economy as a result of the temporary closure of shops, factories and offices, and this paints a bleak picture not only for the Chinese economy but for the global economy, Because if China becomes economically paralyzed, it will likely also harm the economies of all countries of the world.

Bitcoin

Bitcoin

In fact, China continues to suffer economic damage after the stumbling blocks over the past year resulting from the escalation of the trade war with the United States, and with the current turmoil, its crisis is likely to worsen.

Therefore, it would make sense if some people in China and elsewhere were buying gold or bitcoin as stores of value to hedge against potential crashes in the global bond and stock markets, (although US markets have been relatively stable due to what is happening in China), and there is Many other undesirable scenarios if this epidemic in China becomes a pandemic.

Bitcoin Awaiting Halving

But what about the next Bitcoin Halving that will halve the reward, which is expected to happen 90 days from now?

Discussions are still ongoing on that issue especially as we approach the halving date, there is bound to be increased coverage of what this event means in the media, and this could easily lead to the generation of the largest FOMO at scale among retail investors.

Now that the bitcoin price has once again surged above $10,000, discussions about halving are likely to become an influence that will support the currency strongly over time, and many analysts are expecting bitcoin to hit new all-time highs above $20,000.

At the moment, Bitcoin will not only need to push back above the $10,000 level but will need to hold it aggressively to turn a strong resistance level into support.

The $10,000 level has been the key level for bitcoin over the past few years, serving as the starting point for the 2017 bitcoin parabolic rally to $20,000.

Mohamed Abdel Khaleq
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