According to the GTI Vera Convergence Divergence Indicator, which measures up and down shifts, the Bloomberg Galaxy Crypto Index flashed its first buy signal in over three months. In addition, it ended the strongest selling trend since late July.
Cryptocurrencies have been under pressure this year, selling off in tandem with traditional assets as investors try to price in the coronavirus outbreak that has shut down economies globally. In the meantime, arguments that digital currencies act as havens have lost steam, with bitcoin declining more than 25% in March. The largest digital token is on pace for its third consecutive quarterly decline.
Still, many investors remain bullish on digital assets as central banks around the world take unprecedented steps to shore up their economies. Billionaire investor Mike Novogratz of Galaxy Digital Holdings, for instance, said last week he’s used recent dips to buy bitcoin.
“Central banks continue to print money and route it through expensive networks of people and banks, further inflating debt. A decentralised currency and exchange like bitcoin breaks this cycle of money leakages,” said Christel Quek, chief commercial officer and co-founder at Bolt Global. “I see cryptocurrencies emerging stronger after the pandemic settles.”
‘Name of the game’
Bitcoin fell 6.7% as of 10.40am in New York on Monday to trade around US$6 346. Peer coins, including litecoin and XRP, also increased. The Bloomberg Galaxy Crypto Index lost as much as 10% during the session.
“Bitcoin is much more valuable than its current price, but it is still a relatively new asset class and technology,” said Don Wyper, chief operating officer at DigitalMint. “In the short term, volatility is still the name of the game.” — Reported by Vildana Hajric, with assistance from Kenneth Sexton, (c) 2020 Bloomberg LP