Some Probable Fundamental Reasons Behind Bitcoin’s Bullish Bias

Some Probable Fundamental Reasons Behind Bitcoin’s Bullish Bias

Bitcoin has been engulfed in explosive uptrends for a few weeks now. Bulls have helped Bitcoin rally from its recent low of $3,900 which is now at the doorstep of the five-digit region. This “V-shaped” recovery has been due to many technical factors. However, there are some key fundamental drivers also responsible for this remarkable recovery.

Alex Krüger, a well-known cryptocurrency economist, lists three fundamental factors largely responsible for the bullishness seen in the price of Bitcoin.

Firstly, he cites the current loss of faith in government institutions by the public globally as one of the reasons Bitcoin is now considered a preferred investment instrument. The weak response to the Coronavirus pandemic by governments across the globe speaks volumes of how unreliable the government and government institutions have become.

Krüger also cited that investors have been flushed out of the risk curve due to increased liquidity and diminished interest rates. These factors have driven many investors to more volatile assets like Bitcoin.

Finally, he mentioned that the negative interest rates executed by several central banks serve as a bolstering agent for Bitcoin considering that such policies will trigger inflation soon. These fundamental factors appear to be the drivers behind Bitcoin’s push for $10,000 and higher.

BTCUSD – Daily Chart

Bitcoin Value Forecast — May 8

Bitcoin Major Bias: Bullish

Supply Levels: $10,000, $10,550, and $12,300.

Demand Levels: $9,500, $9,250, and $8,800.

Bitcoin, in an unprecedented bull run, tested the $10,000 level after destroying the strong resistance at $9,500 some hours ago. Although the price of BTC could likely continue to the $10,500 level and higher, a quick pullback to the $9,250 level is expected to occur soon.

However, bulls will have to take a stand at that support line should this pullback occur. Failure to defend it could send the price of BTC to lower support levels.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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