Bitcoin has continued to surge in today’s trading session after jumping more than 20 percent yesterday as traders jump on the bandwagon, afraid of missing out on a rally which may continue over the coming days.
The world’s favourite crypto currency has once again shown just has volatile it can be which makes it popular amongst traders as a speculation tool trying to make quick profits in each direction by placing buy or sell orders
"It’s likely that speculators are already starting to jump in to bitcoin because they feel a big buy order may be coming," said Simon Peters, bitcoin and crypto analyst .
"It will be interesting to see if demand continues to increase over the days to come and whether we start seeing some more prominent higher highs and higher lows in price action. This would give me more confidence that a recovery is on the cards," he added.
An interesting thing to note about the rally in bitcoin over the last 2 days is that there were no similar rises in world stock markets, which leaves the cryptocurrency as a stand alone investment in which moves are not dictated by the market as a whole.
This may add evidence to a growing belief that Bitcoin is in fact up there with gold as a safe haven asset where investors are looking to put their money during these turbulent times
“Last week’s nosedive in crypto markets was part of a universal rush to cash among investors in response to unprecedented panic and uncertainty, said Catherine Coley, CEO of Binance.US,
“Bitcoin’s appeal as a safe haven and deflationary asset is once more apparent amid the raft of fiscal and monetary stimulus from governments and central banks around the world, reminding investors just how precarious the existing financial system really is,” she said.
Some analysts however are warning investors to proceed with caution as this could be known what is called in the market as a “dead cat bounce”, where certain segments of the market jump in to push the price up which is followed by a quick reversal leaving some investors holding the bag and nursing heavy losses.
"Right now, most people are shell-shocked, they’re still in the denial phase. I believe we are primed for a powerful bull trap very soon, especially with all these stimulus announcements “ said economic analyst Jesse Colombo
“ The market will probably bounce hard, which will suck in all the dumb money Once investors get complacent and cocky again after a sharp market rebound, that sets the stage for the rug to be pulled out from under them, which will lead to an even more powerful crash than the first one." He added.
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