The second quarter of 2020 was very profitable for bitcoin investors, as the leading cryptocurrency climbed 42% posting its first quarterly gain in almost a year, while closing the first quarter with a loss of 10.6% driven by the Black Thursday crash.
Bitcoin price rose from around $6,420 at the beginning of April to over $9,140 at the end of June, and despite this amazing rally, it is still struggling to break the $10,000 psychological support level.
Bitcoin’s gains during the second quarter are the fourth best quarterly closing since 2014, as it came in the first place in the second quarter of 2019 that achieved gains of about 158% and in the second place in the second quarter of 2017, which achieved a rise by about 125%, and came in third place Q2 2016 earnings estimated at 62%.
Big challenges
Historically, the third quarter has been a strong challenge for Bitcoin Q8Trade Throughout its history, except for the third quarter of 2017, which achieved an increase of about 80% and the year 2018 which added about 2.9%.
While the poor performance may not be as good during the third quarter in all years, crypto analysts expect 2020 to show little difference, in large part due to bitcoin transaction volumes not rising in recent days.
However, there is still optimism among some that the third halving that occurred for Bitcoin will lead to an increase in its price in this quarter and beyond, expecting its price to reach $ 20,000 by the end of the year.
Expectations of a decline in Bitcoin, tracking the Standard & Poor's Index 500
A report indicated that the third quarter of Bitcoin will be weak due to increasing concerns about corrections in the stock market, and added that the S&P index will rise in the short term by at least 10% from its current levels, and in the long term the index is expected to live in a worst-case scenario, falling by 20% Or more.
As Bitcoin is currently strongly correlated with US stock market movements, it is likely to fall into a downward pit, as the monthly correlation between the leading coin and the US benchmark has reached record levels exceeding 77%.
The S&P 500 Index has risen by more than 25% since March 23, supported by the Federal Reserve's unprecedented monetary policy to help the economy from the negative economic fallout from the coronavirus shutdowns.
However, its growth has completely sidelined weak economic fundamentals caused by a record number of bankruptcies, expectations of earnings for the weakest companies and a resurgence of coronavirus cases.
Analysts expect the S&P 500 to undergo a long-awaited downward correction in the third quarter, and most expectations are for it to lose at least 10% from its current levels.
And since Bitcoin follows an index Standard & Poor's 500 anything bearish for the index would mean the same for the cryptocurrency, moreover Bitcoin is also likely to remain under downside risk.
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