US delayed tax payment after 3 months to fight Covid-19, Bitcoin price increased by 20% on the day, is this a "bull trap"?

With Bitcoin increasing by more than 20% in the past 24 hours, many holders are excited. But it still seems unclear how positive this latest pump is. Is the cow plunging into the trap?

Does Bitcoin really pump 20%?

Bitcoin analysts have given mixed views on whether the latest pump continues to drive prices soaring. Some seasoned traders are thrilled that Bitcoin has split from the stock market while others have called for caution.

“BTC gradually separated from gold and S&P 500 when the price exceeds 6,400 USD ”

Indeed, during the 11-year trajectory of development, the price of Bitcoin has been considered unrelated to the stock market. The story of a safe haven comparing Bitcoin to gold is widely believed. When the stock market declines, Bitcoin often holds or even goes up.

However, just a few days ago, the situation completely reversed the rule. The cryptocurrency market has experienced a major selloff along with the S&P 500.

Even so, Coinbase Note that The correlation model is suddenly positive, but exchanges in traditional markets pause to sell:

“Bitcoin's peer-to-peer protocol has been active 99.98% of the time since it was created on January 3, 2009. Moreover, Bitcoin's spot market liquidity is global, decentralized and operates 24/7 ”.

With stocks not rising and Bitcoin plunging, "a positive correlation with the S&P 500 may be temporary." However, that does not mean Bitcoin's trend is clear.

Trader still calls for caution

While positive sentiment appears somewhere in the market, some traders call for caution. This may be a liquidity search before the next sharp decline. As such, many people seem to agree the main support needed to flip is $ 6,400.

“BTC has rejected the control point (price in highest trading volume) - was The level plays a supporting role 2 times before break down

For me to start feeling the price increase, the price needs to flip at least 6,$ 400 on high time frames

Even so, the stock was sold off will not be a sign of price increase for BTC ”.

Both Josh Rager and CryptoBirb cited $ 6,400 as very important. CryptoBirb has even gone so far as to predict Bitcoin price could return to $ 7,600 because "there's no resistance between 6.4k and 7.6k".

“BTC is exploring a low range ever Flip Fort resist. Little bith pole for cows is no resistance between 6.4k and 7.6k

Retest 5.4-5.6k would be the healthiest to confirm price action is gradually recovering after Friday the 13th ”.

Rager also pointed out that even breaking $ 6.4k, sold-out stocks will not be a sign of price increase for BTC. Coinbase also warned that if the S&P 500 correlation persists again in the future, "Bitcoin will invade unexplored territory."

At the time of writing, Bitcoin is trading below $ 6,664. This could indicate that the leading cryptocurrency will continue to rise and most likely drag along the rest of the crypto market.

However, these are uncertain times and the worst of the pandemic has yet to come. Bitcoin can prove its value as the sound money of the era when fiat collapsed. But, to be honest, it is very unlikely.

Cause of price increase

Treasury Secretary Steven Mnuchin said on Friday that the IRS will extend the national income tax payment date to July 15, after three months from the normal deadline.

The move is the latest in a series of emergency measures to cope with the financial collapse caused by the Corona pandemic.

"Following President Donald J. Trump's guidance, we will move Tax Day from the 15th/4 to 15/7. All taxpayers and businesses will have more time to file and make payments without must return interest rates or penalties.

Mnuchin also calls for taxpayers, who expect to be refunded this season, "pay now to get your money back."

"I encourage all taxpayers Fulfill the obligation now to be tax refund.

Mnuchin's advice is underlined by the fact that as of March 6, the IRS has received 67.9 million in personal income taxes and has returned $ 52.7 million.

The average previous refund amount was $ 3,012.

The White House did not immediately comment on Mnuchin's announcement.

Typically, April is the month when Americans have to fulfill tax obligations to the government and tend to dump Bitcoin in bulk in exchange for cash, causing a price drop. Therefore, the current postponement may be a positive sign for Bitcoin.

You can see the price of BTC here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Minh Anh

According to Bitcoinist

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