The entire world witnessed a once-per-decade bout of capitulation in mid-March that sent virtually all global markets into a tailspin, with the effects of this being particularly impactful to Bitcoin.
The benchmark cryptocurrency saw a sharp decline that led it to nosedive from over $8,000 to lows of $3,800.
This decline was perpetuated by a torrent of liquidations on the crypto trading platform BitMEX that proved to be too intense for buyers to absorb.
In the time since rebounding from these lows, however, BTC has immensely outperformed the benchmark stock indices – a trend that is likely to persist throughout the months ahead.
Bitcoin outperforms S&P 500 by 30% as outlook grows bright
Bitcoin’s recovery seen throughout the past couple of months has been one for the history books.
After bottoming at $3,800, it was able to garner enough momentum to climb to highs of $10,500 before facing some heavy resistance that led it to fall as low as $8,100.
In the time since the rejection at these highs, buyers have been able to muster up enough strength to send it back into the mid-$9,000 region.
This recovery has far exceeded that seen by the S&P 500 index, which has only climbed 25 percent from its March lows while Bitcoin has climbed over 55 percent.
“Since the stock market bottom, Bitcoin has far outperformed the S&P 500. Currently: Bitcoin: up 55% S&P 500: up 25%.”
Here’s why BTC is likely to continue outperforming the stock market
As reported by CryptoSlate yesterday, Federal Reserve Chairman Jerome Powell recently offered a cautious outlook for how long it may take the U.S. economy to get back to normal once the COVID-19 pandemic passes.
These comments sent chills down the spines of investors, causing the stock market to slide.
Unlike the price action seen in March, however, this has not seemed to have any type of dire impact on Bitcoin, as the cryptocurrency continues pushing higher.
This is a trend that is likely to persist in the days and weeks ahead as it continues decoupling from the traditional markets, and one economist is noting that BTC is like a “pressure cooker” that could soon see its lid pop off.
A trader made this analogy in a recent post:
“Think of Bitcoin as an immense pressure cooker and you will see what I mean. The lid on this cooker is being kept on by call sellers and derivatives hedgers. Once the lid pops, it will be gone for a while. Just need to keep the fire on long enough for it to pop.”
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