Amid news that the U.S. Federal Reserve has lifted its cap on government bond and mortgage bond funds, the Bitcoin Price (BTC) has passed the $ 6,000 price mark.
Given the stakeholders looking to boost the U.S. economy after the panic caused by the current COVID 19 pandemic, the top-ranked cryptocurrency appears to be another game of significant recovery after falling to $ 3,800 in early March .
Despite the upward movement in prices, the network's fundamentals still seem to have problems as the blockchain hash rate continues to drop as it exits mining nodes. The scale of the decline is so great that experts say a 15% reduction in difficulty is in sight, even if the block reward is less than two months away.
The Bitcoin price gets back $ 6,000
In the past few hours, the Bitcoin price has risen significantly above the $ 6,000 mark and has temporarily reached $ 6,600. Despite the pressure of a giant green candle, the highest ranked crypto has so far failed to exceed the $ 6,800 resistance level and at the time of printing fell slightly above the $ 6,300 price point.
However, Monday's bitcoin price hike is a significant development given current events in the U.S. financial sector.
As reported by CNBCThe Fed has announced plans to buy unlimited assets to stimulate the US stock market recovery.
According to the Fed, aggressive intervention strategies will be decided after the global economy is hit by the COVID 19 pandemic. The reported infinite quantitative easing is in addition to the Fed's recent spending of $ 700 billion on government bonds and mortgage-backed securities.
Despite the Fed's announcement of an expanded balance sheet, markets have not yet responded positively to the Dow's drop of another 260 points. As far as the crypto market is concerned, Bitcoin's current gains are a departure from the continuing fall in Altcoin token prices.
At the time of printing, many of the Altcoin tokens are still in the red as the rise in Bitcoin prices is not yet stimulating a recovery for the rest of the crypto market.
Cryptocurrencies are still fluctuating from Black Thursday, with both Bitcoin and Ethereum falling about 50%. However, Bitcoin appears to be on a recovery path and, as previously reported, has risen by more than 80% since falling to $ 3,800 Blockonomi.
Correlated to Not correlated?
Bitcoin price hike at a time when the U.S. stock market is trending further down could help restore crypto's uncorrelated status. Bitcoin trading has had its highest correlation with the stock market in the past 30 days, reaching 0.6 last week.
The increase in the correlation of BTC with the S & P 500 since the beginning of the COVID 19 panic has helped to affect Bitcoin's image as an uncorrelated asset. However, the change came at a time of massive risk reduction when investors appear to be trying to liquidate their assets for cash.
While the bitcoin price may be recovering, the network's fundamentals are still affected as the hash rate continues to drop.
Since the beginning of March, the bitcoin hash rate – the computing power for securing the network – has fallen by more than 24% as mining nodes leave the blockchain in droves.
With the significant reduction in the hash rate, the Bitcoin network is expected to experience a downward difficulty adjustment of up to 15%. In the meantime, the halving, which reduces the block reward by 50%, takes less than two months.