Around 00:15 (UTC) — or (roughly 45 minutes before stock markets in South East Asia usually open) — on Wednesday (January 29), Bitcoin’s price surged past $9,400, which means that it has gone up around 30% so far this year.
According to data from CryptoCompare, at 23:15 on the day before, Bitcoin was trading at $9,131. Within one hour, Bitcoin’s price had gone up 3% to reach $9,402:
This is not only the highest level it has been in 2020, but the highest level it has been in eight weeks (since the $9,400 level was last seen on 4 November 2019), as you can see from the two-week BTC-USD price chart shown below:
Although we can’t be sure how much (if any) of Bitcoin’s rise in price in 2020 is due to panic over Novel Coronavirus (2019-nCoV), a new strain of coronavirus, which the World Health Organisation’s China office first heard about on 31 December 2019, more and more analysts and investors seem to be starting to believe that the longer this virus continues spreading around the world, the greater the negative impact on all kinds of businesses, which would mean declining stock prices.
Not even Apple, one of the most successful companies on the planet, seems immune. Yesterday, Tim Cook, the CEO of Apple, said during an earnings call following the publication of Apple’s quarterly earnings report:
We have closed one of our retail stores and a number of channel partners have also closed their storefronts.
Cook mentioned that it has suppliers in China’s Wuhan region, and that Apple is “working on mitigation plans to make up any expected production loss.” He also said that due to the extension of the new year holiday in China — a measure taken by the Chinese government in an attemp to control the spread of the virus — the reopening of its production facilities would be delayed and that the company had taken this into account in coming up with its revenue projections for the coking quarter.
Although various analysts have observed a negative correlation between stocks and Bitcoin during times of panic, not all of them are convinced this correlation is meaningful, as Alex Krüger, a popular macroeconomist and crypto analyst/trader pointed out yesterday:
19/ The bitcoin-stocks correlation also increases during panics. The correlation is moderately negative, but this value is just an estimate of the true correlation, and the estimate is highly uncertain => that correlation is *not* meaningful. pic.twitter.com/FJ4bgsLNZi
— Alex Krüger (@krugermacro) January 28, 2020
Of course, another possible explanation for the strong price rally that Bitcoin is enjoying in 2020 is that this is partly due to Fear of Missing Out (FOMO) over Bitcoin’s upcoming block reward halving, which is expected to take place on 12 May 2020.
As for where the Bitcoin price is headed next, here is crypto analyst/trader Josh Rager, who is also a Co-Founder of online crypto learning platform Blockroots, with his thoughts on Bitcoin’s latest price action:
How long you bears going to stay bearish?
The downtrend is clearly broken on high time frame and if Bitcoin closes above $9557, that's a higher-high
Sure, BTC could pullback but stop with the $5k calls until price breaks at least below $8k (if it even gets there again) pic.twitter.com/MHLuSQih6M
— Josh Rager 📈 (@Josh_Rager) January 28, 2020