Daily Market Update - May 1, 2020

$BTC 24 Hour High $9,048.02

$BTC 24 Hour Low $8,610.68

$BTC %1.09

Bitcoin cools after jumping to it's highest levels in nearly two months. Increasing unemployment is causing investors increasing concern. Another 3.8 million Americans filed for jobless claims this week, bringing the total to 30 million in the past six weeks after the coronavirus pandemic significantly slowed economic activity. 

The hits just keep on coming for the U.S. economy. The unemployment data came a day after GDP numbers showed the worst U.S. economic output since 2014. While Wednesday’s dismal economic data didn’t give markets a reality check, it was a different story when it came to showing how many people are out of work. The S&P 500 index slipped 1% Thursday. Europe’s FTSE Eurotop 100 index of largest companies in Europe also closed down, by 2.3%.

On the daily chart, BTC is trading above both its 21 and 50-day EMA line. RSI is currently at ~75, indicative of significant bullish momentum.The last time RSI was at these levels was back in June 2019! The 21-day EMA line has crossed to the upside of the 50-day EMA line. BTC has also broken through its 200-day EMA resistance line - a resistance line is a line which many recognize as the line that distinguishes a bullish from a bearish trend.

On the weekly chart, BTC is trading above its 200 EMA resistance line. It has also broke through its 21 and 50 EMA line concurrently. The signal line has crossed to the upside of the MACD line.

Ahead of Halving

Bitcoin network hashrate has been rising as the May 12 halving approaches. Some analysts and observers forecast a reduction in computing power used once the network’s reward reduction occurs. 

Bitcoin halving-related FOMO, or “fear of missing out” as it’s often called, was likely stirred up Wednesday when bitcoin’s price rose 13% in 24-hour trading at one point. More frenzy is expected as the bitcoin halving event gets closer, according to Chris Thomas, head of digital assets at Swissquote Bank. 

Large crypto investors, popularly known as “whales,” seem to be accumulating bitcoin amid the ongoing price rally. 

The seven-day moving average of the number of addresses holding 10,000 bitcoins or more rose to 111 on Wednesday, the highest level since Aug. 2, 2019, according to blockchain intelligence firm Glassnode. That number has risen by more than 11% since early March. 

“The increase in the number of BTC addresses with more than 10,000 BTC is likely the result of long-term holders coming back online to expand their holdings,” said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds. 

Many investors anticipate the cryptocurrency’s price would go up after halving, as the asset would become more scarce to satisfy the demand. Reinforcing this belief is the historical data, which shows bitcoin experienced solid bull runs in the year following previous halvings.

“At the first halving in November 2012, the price went from $11 to over $1100 a coin a year later. Then after the second halving in July 2016, bitcoin went from $600 to over $20,000 by the end of 2017,” said George McDonaugh, managing director and co-founder of publicly listed cryptocurrency and blockchain investment firm KR1 plc.

The year-to-date performance may reinforce the narrative that bitcoin is a hedge against global economic malaise, fiscal and monetary indiscipline and could continue to draw demand from both small and large investors. 

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