At a time when the global economy is facing huge challenges, governments around the world have taken large-scale stimulus measures. The United States, in particular, has launched a stimulus plan of up to $2 trillion to cope with the economic recession caused by the epidemic. The implementation of this policy has not only had a profound impact on traditional markets, but also provided strong support for the price increase of digital currencies such as Bitcoin. The price of Bitcoin has rapidly soared from more than $3,000 at the beginning of the epidemic to $6,700. What kind of logic and trend is hidden behind it?

First of all, it is worth noting that the introduction of the stimulus plan has directly led to an increase in market liquidity. The injection of $2 trillion has led to a significant increase in the amount of funds available in the market. Faced with an environment of low interest rates and currency depreciation, investors have turned their attention to Bitcoin, an alternative asset. As many economists have pointed out, expectations of inflation often prompt investors to seek assets that preserve value, and Bitcoin just meets this demand. As a digital currency with a limited supply, Bitcoin's scarcity makes it a powerful tool to fight inflation.

In the past few months, more and more institutional investors have also begun to pay attention to the Bitcoin market. For example, Paul Tudor Jones, a well-known hedge fund manager, publicly stated that he sees Bitcoin as "digital gold" and uses it as a hedge against inflation. The proposal of this view quickly triggered heated discussions in the market, and more investment institutions began to enter the market, further driving up the price of Bitcoin.

In addition to the participation of institutional investors, the enthusiasm of retail investors should not be underestimated. Due to the lockdown measures caused by the epidemic, many people were forced to stay at home, and with more leisure time, more and more people began to pay attention to and learn about Bitcoin and other digital currency investments. Discussions and trading activities about Bitcoin on social media platforms are also increasing, forming a wave of participation by all people. This phenomenon is particularly evident among the younger generation, who are more receptive to emerging things and willing to try different investment channels.

Of course, the stimulus plan brings not only capital inflows, but also increased confidence in the Bitcoin market. After the bubble burst in 2017, investors in the Bitcoin market gradually became cautious about their expectations for the future. But this time, as more and more mainstream financial institutions began to recognize the value of Bitcoin, market confidence has significantly recovered, and investors' risk appetite has also increased. This recovery of confidence has directly contributed to the rapid rise in Bitcoin prices.

However, the rise in Bitcoin prices is not without risks. Market volatility is still a factor that cannot be ignored. Although the current market environment is favorable for Bitcoin, any unexpected events may lead to drastic price fluctuations. For example, the recent tightening of regulatory policies on digital currencies by various governments has undoubtedly brought uncertainty to the market. Although Bitcoin supporters believe that such regulation is necessary and helps to standardize the market, potential risks still exist for short-term investors.

In this context, investors need to evaluate their investment strategies more carefully. For those who have just entered the market, it is crucial to understand the basic knowledge and market dynamics of Bitcoin. At the same time, diversification and reasonable allocation of assets are also effective means to reduce risks. Many successful investors emphasize that investment is not only about choosing the right assets, but also about choosing the right time and strategy.

In addition, technical analysis also plays an important role in Bitcoin investment. By analyzing market trends, investors can better grasp the timing of buying and selling. Many traders will use tools such as charts and indicators, combined with market fundamentals information, to formulate corresponding trading plans. Although technical analysis is not foolproof, it undoubtedly provides investors with a more scientific basis for decision-making.

As the price of Bitcoin rises, the surrounding ecosystem is also growing and developing. Many new crypto projects and financial products have been launched one after another, providing investors with more choices. Decentralized finance (DeFi), as an emerging field, is attracting more and more attention. Through smart contract technology, DeFi platforms can provide users with services such as lending and trading, further enriching the application scenarios of digital currencies.

Industry insiders have different opinions on the future development of Bitcoin. Some believe that Bitcoin will continue to maintain its upward trend and may even break through its historical high; while others are cautious and believe that the risk of market bubbles still exists. In any case, as an emerging asset class, the direction of Bitcoin will undoubtedly have a profound impact on the global financial market.

In general, the launch of the $2 trillion stimulus plan has provided strong support for the rise in Bitcoin prices. This policy not only promotes market liquidity, but also boosts investor confidence. With the participation of more and more institutional and retail investors, the market ecology of Bitcoin is undergoing profound changes. However, while enjoying the market dividends, investors should also remain vigilant, reasonably assess risks, and formulate scientific investment strategies. In the future, whether Bitcoin can continue to maintain its upward trend is still a question worth pondering.

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Bitcoin price rises to $6,700 on $2 trillion stimulus package! Bitcoin price was pushed to $7,000 as US lawmakers agreed on a $2 trillion stimulus package to repair the socioeconomic damage caused by the coronavirus pandemic.

Bitcoin (BTC) prices continued to rise on March 25, as U.S. stocks saw a rare historical rise of more than 11% yesterday due to the possibility of a trillion-dollar economic stimulus plan. This is the largest single-day increase since 1933.

According to Bloomberg Markets, as of press time, the BTC market price is trying to gain a foothold at a high of $6,700, while the Dow futures price has risen by more than 114 points.

The strong rebound on March 24 also shows that investors expect the stimulus plan to help stop the market bleeding and restore investor confidence.

Cryptocurrency market daily performance. Source: Coin360

Earlier, the price of the currency soared to $6,832, almost surpassing the previous daily high of $6,905, and then fell back slightly to the range of $6,500 to $6,750.

BTC USDT 4-hour chart. Source: TradingView

Currently, support is at $6,500, which is consistent with the ascending trendline, but if the price falls below the trendline, support is at $6,451, where the 50% Fibonacci retracement level is.

As of press time, the 4-hour chart shows that the relative strength index (RSI) is still in bullish territory at 61 points.

BTC USD daily chart. Source: TradingView

In the daily window, the MACD histogram shows upward momentum, while the Chaikin Money Flow Oscillator (CMF) is also above 0.0 and is moving hand in hand with the price increase. As the price of Bitcoin gradually rises to a high above $6,905, the 61.8% Fibonacci retracement level ($7,088) may be a difficult resistance line position to overcome.

If Bitcoin If the price of the coin can break through this resistance level, traders expect Bitcoin to continue its stair-step move toward $7,650. For short-term traders, an upward breakout above $7,685 could see prices reach the upper Bollinger Band position of $6,983, or even $7,088.

In the event of a price reversal below $6,450, there is also strong support and a high-volume VPVR node at $6,200.

Bitcoin daily price chart. Source: Coin360

Altcoins also rose modestly as Bitcoin pushed higher toward $7,000. Litecoin (LTC) rose 3.73%, Ethereum (ETH) rose 3.16%, and Monero (XMR) rose 7.72% to $47.02.

Currently, the total market capitalization of cryptocurrencies is $185.9 billion, with Bitcoin accounting for 65.6% of the market.