Bitcoin, the most famous cryptocurrency in the crypto ecosystem, has everyone focused on its price due to the Coronavirus (Covid-19). Much is read and heard about the bitcoin price because of the instability that the coronavirus has created in markets around the world. Let's start by briefly describing bitcoin and a little about coronavirus as well.
What is Bitcoin?
Bitcoin is a digital currency, the most popular so far, that allows us to make transfers of scarce digital assets from person to person without the need for intermediaries. All of this thanks to four technologies that are P2P networks, blockchain, cryptography, and proof of work.
What is Coronavirus?
First, coronaviruses are a broad family of viruses that can cause various conditions. These viruses can cause anything from fever and respiratory symptoms to pneumonia, severe acute respiratory syndrome, kidney failure, and even death.
Recommendations to avoid spreading the coronavirus are good hand and respiratory hygiene, such as covering your mouth and nose when coughing and sneezing. Additionally, practicing social distancing is advised to avoid contagion.
Is Bitcoin Price Affected by the Coronavirus?
Bitcoin price is always a topic of conversation in the cryptocurrency ecosystem. The year 2020 began with a bitcoin price of approximately $7,200. Later on, the price of bitcoin rose to a maximum of $10,335, and in the middle of March, it came close to $4,200. Right now, the average market price of bitcoin remains below $6,800.
It is fair to say that the world economy has slowed down for a few months and to put it simply; the economy is not doing very well. A couple of months ago, you could see a drop in the markets around the world, and in some newscasts, these topics were already being discussed. Still, it was not until the coronavirus spread around the world that the markets felt the blow that is affecting now having a significant effect.
Within all that is going on, the price of bitcoin has been negatively affected in the middle of March. However, it has had a slight recovery in recent days, testing $6,800.
On the one hand, as the economy stagnates, the price of bitcoin is more likely to go down. A drop becomes more likely if bitcoin is perceived as a high-risk asset rather than a safe-haven one. And in times of economic crisis, people sell their high-risk assets to hold cash.
Additionally, there is an important event that could disadvantage the price of bitcoin. This event will take place on March 27 and is about the issuance of payments for futures contracts by CME Group. According to the history of the price of bitcoin, each time this scenario occurs, the value of bitcoin behaves with greater volatility.
On the other hand, there is an opportunity for bitcoin to become more used by the general population, thanks to the fact that remote work is increasing and more companies and workers are willing to use bitcoin as a means of payment.
In order to forecast the behavior of the price of bitcoin, there are different market indicators. One of the most important that you should thoroughly analyze and follow the behavior of is the 200-week moving average of the price of bitcoin. To put it simply, it's a line on the bitcoin price chart that represents the average closing price for the last 200 weeks. This indicator helps analyze and identify long-term trends.
In short, the effects of the Coronavirus on the traditional economy must be taken into account. As we have seen, the increase in the use of bitcoin for payments to quarantined workers, the payments of futures by the CME Group, the indicator of “Fear” of Bitcoin, and the analysis of the 200-week support of the price of bitcoin are some of the factors that must be taken into account in order to best forecast the price of bitcoin.
Keep in mind that it is almost impossible to determine a precise future valuation, but what is sought through analysis is to understand the behavior of the price of bitcoin or cryptocurrency, in order to know whether it may be beneficial for you to buy or sell. Here we bring you three tips on investing for these challenging market conditions.
3 Investment Tips Regarding the Current Price of Bitcoin
Tip 1: Economic crises are not forever.
In a moment of crisis such as the one we are going through at the moment, both due to the coronavirus and other world economic issues, it is natural to feel fear for the future of our work or company. It is also natural to want to be conservative with spending. However, great investors have extraordinary minds! Let me explain; a good investor remains calm when everyone is behaving hysterically because of a crisis. Controlling the emotions helps him or her to take advantage of the opportunities that appear in these precise moments. Such as moving to purchase bitcoin and other cryptocurrencies while others are bearish or scared.
Tip 2: The time to buy is when the markets are down.
When Baron Rothschild was asked what one of his best recommendations regarding the art of investing would be, he said, "The time to buy is when there is blood on the streets." While it is true, he said it in a very cold way, let's focus on the most important message, the best time to invest is when all prices have plummeted. It is at these times that you can take advantage of the possible rise in the markets.
Tip 3: Educate yourself about bitcoin and other cryptocurrencies.
Educate yourself so that it is an investment and not an expense. Research the easiest, fastest, and lowest cost ways to buy and sell bitcoin and other cryptocurrencies. We invite you to review our platform https://localcoinswap.com/ and ask all the questions you want about bitcoin, ethereum, tether, dai, dash and more in our telegram group https://t.me/localcoinswap
Yes, we are entering into a volatile time in the market. Yes, the situation seems to have been aggravated by the coronavirus. However, in all market situations, there are opportunities. To take advantage of them, you must understand that the crisis does not last forever, take advantage when the markets are bearish, and educate yourself on bitcoin and other cryptocurrencies so that you can make sound decisions.
And finally, regarding the coronavirus, remember that if you take care of yourself, you are also taking care of the people you love the most.
See you soon,