The President of the European Central Bank (ECB) Christine Lagarde said that the coronavirus pandemic has acted as a catalyst in boosting the adoption of digital payments in the European Union. Lagarde expects the majority of the consumers to continue using digital services even in the future.
In order to support the digitalization, the ECB has formed a task force, which is exploring the benefits, risks and operational challenges of developing a digital euro and is expected to announce its findings within the next few weeks.
While a central bank digital currency might build up consumer interest in the short-term, it is unlikely to sustain because the stimulus measures announced across the globe since the start of the outbreak have reduced the confidence in fiat currencies.
Daily cryptocurrency market performance. Source: Coin360
This has driven investors towards other assets such as stocks, gold and cryptocurrencies. Bloombergs crypto newsletter shows that the correlation between gold and Bitcoin (BTC), when calculated on a monthly basis has hit a 10-year high. This indicates that several investors are viewing Bitcoin as a safe haven asset similar to gold.
However, every asset goes through periodic corrections. Lets analyze the charts of the top-10 cryptocurrencies to ascertain whether the correction is over or not.
The bulls are currently attempting to push Bitcoin to the top of the $9,835–$10,625 range. The price action inside a range is usually random and it is difficult to predict the direction of the breakout with certainty.
BTC/USD daily chart
It is generally assumed that the breakout will happen in the direction of the trend that was prevailing before the range formed. In this case, the BTC/USD pair had dipped from the recent highs of $12,460, which shows that the bears had the upper hand.
The down ...