After sliding below the $13,000 support level on Wednesday, the king of cryptocurrencies appears to be back on its way up.
The sell-off yesterday was felt across stock markets and gold as investors throughout the world were shaken by reports of a resurgence in COVID-19 infections and new restrictive lockdowns. The bitcoin price slumped to as low as $12,800 during the latest pullback. Investors, however, bought the dip after ECB’s decision to provide further monetary support amidst increasing coronavirus cases as well as positive U.S. jobs data.
Bitcoin Surges On ECB’s Announcement, Robust U.S. Data
Bitcoin has been on an upswing these past few weeks despite a gloomy mood in the traditional markets. Equity markets have been extending losses as coronavirus cases surge, particularly in the United States, the UK, and Brazil.
Bitcoin has gained more appeal as a safe haven asset in the face of economic uncertainty especially with the growing demand for the asset from institutional investors. However, more often than not, a strong pullback in the legacy markets has dragged bitcoin prices down.
On Thursday, the price of the flagship cryptocurrency shined boosted by two major catalysts. Firstly, the European Central Bank (ECB) announced that it is willing to introduce more stimulus programs in December to bolster the deteriorating economy.
The ECB stated:
“The Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favorable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path.”
ECB President Christine Lagarde emphasized that the bank will use everything in its power to address the situation. In other words, more monetary stimulus for Europe is on the horizon in order to contain the second coronavirus wave that’s threatening to overwhelm the eurozone economy.
Secondly, the price of bitcoin has benefited from the declining U.S. jobless claims. Specifically, the number of Americans that filed for unemployment claims dropped last week to the lowest level since coronavirus struck.
Bitcoin is currently trading for a price of $13,469, down 0.17% on a 24-hour adjusted timeframe. Still, activity in the options markets indicates that BTC has a mere 6% probability of reaching its all-time high of $20,000 by December 31, 2020. This is according to data provided by on-chain monitoring resource Skew. The options market, which is mostly dominated by professional traders, however, presently sees a 40% chance for BTC to end the year trading above $14,000.