The coronavirus global outbreak has hit the world hard. Economies are hanging by a thread, businesses are shutting down, and royalties are taking massive dips in price. Bitcoin has taken quite a hit as well. After starting the year with a bang, the leading cryptocurrency in the world has seen a strong price decline down to around $5,000.
That price is half of what Bitcoin was worth in early February. It’s all because of the coronavirus pandemic, of course, but it’s also safe to say that it has caused a lot of negative vibes on the market. If the pandemic continues to decimate Europe, further price declines are expected.
There has been a positive thread of light in the past 24 hours, though. After American President announced a $1 trillion stimulus as a response to the coronavirus pandemic, Bitcoin’s price jumped up to $5,500. This comes after it hit rock bottom at $3,700 just a day before.
The Stimulus Should Help Small Businesses
It may be a small price jump, but it’s a big victory for the leading cryptocurrency in the world. The coronavirus pandemic is affecting the US economy in unprecedented ways and small businesses are taking the largest hit. The Trump administration is well aware of that. In response to it, Treasury Secretary Steven Mnuchin announced a response package worth $1 trillion that would help small businesses stand on their feet.
At the time of the announcement, Bitcoin was in free fall. After falling below $5K and $4K later, there were fears that it could take a dip below $2,000. It would be the lowest point in quite a while and a serious cause for concern for the largest cryptocurrency by market share. As soon as the announcement went public, the price jumped up to $5,500 before settling down at a stable $5,400.
The COVID-19 response package is one of the first steps toward stabilizing the world’s economy. The halt of the global economy is the second-worst problem caused by the pandemic after the wrecked health of millions of people worldwide. World governments have pledged to help to stabilize markets and stop the spread of the virus, and the USA is the first in line.
Resistance at $5,550 Right Now
At the moment, Bitcoin is trading for just around $5.4K with resistance expected at $5.5K. The leading cryptocurrency by market volume seems to be flipping the $5.4K level to support which is quite a positive development. This will allow the price to consolidate in the mid-$5,000 just like last week, putting it in a great position for a run at $6K.
Optimistic traders believe that the price could go over $6K soon. However, for that to happen, Bitcoin will need to push through the $6.4K resistance. A momentum is currently building for the price to jump up, but it could all change soon due to the spread of the pandemic.
For now, countries are doing their best to isolate citizens and curb the spread. As soon as the pandemic is put under control, Bitcoin’s price could shoot up once again.