Bitcoin is experiencing a bitter start to the weekend and has reached interim lows at around 4200 USD. The consequences of the Corona pandemic are having an impact on the economy and all markets and nobody can predict an exact end of the crisis. We take a look at the current events.
At the time of writing, the Bitcoin price is USD 5653, which is a daily loss of just under 20 %. After the stock markets reached new lows during the night, the BTC even fell to a price of about 4150 USD in the meantime. The high volatility will be the downfall of the crypto market in these days. There is panic in the markets and investors are pulling their money out of the highly speculative crypto space. The result is an explosive mix that hits the bear market with full force. FUD (Fear, Uncertainty and Doubt) and Panic-Sells distract from the actual fundamentals and investors try to minimize their losses.
Bloodbath on the stock markets
It was a pitch-black Thursday for the stock markets. The Down Jones Industrial fell by almost 10%, the NASDAQ and the S&P 500 by about 9.5%. The DAX initially started Friday with slight gains, but these evaporated relatively quickly. The coronavirus continues to plunge the traditional markets into a tangible economic crisis. 136300 cases, 4990 fatalities. These are dramatic figures that are causing uncertainty around the world. All major events, conferences and similar events have already been cancelled. Countries like Italy are working at their medical limits and an effective vaccination is not yet on the market.
What is the next step?
In difficult times, there are all kinds of speculations and forecasts about the further course of the corona pandemic and its consequences. No one can say for sure how far the economy will plummet. For crypto investors there are nevertheless several options in the current bear market. Strategies such as “average down” or well-known HODLn are probably among the most popular methods, while many day traders have been able to profit from short options in recent days. Keeping calm is a valuable feature in crypto space. In addition to an economic analysis, one should always look at the fundamentals and use cases, which do not change even now.
Bitcoin: The next limits
After the wild downtrend, investors are now focusing on the support sector at around USD 5500. From a bullish perspective, the next major resistance level is around 5800 USD, after which a jump above the important 6000 USD level would be conceivable. Total market capitalization has dropped by over USD 80 billion in the past 48 hours. This value implies panic among investors. Bitcoin cannot confirm its reputation as a crisis-proof “Store of Value” and alternative assets are even worse off.
A few weeks ago Ethereum attacked the 300 USD limit and the Bitcoin Forks were considered a lucrative insider tip before the upcoming Bitcoin Halving Event. The No.1 crypto currency shot over the magical 10000 USD border and experts attested the “digital gold” a record year 2020, but the corona virus destroyed these prospects. Ethereum finds itself at a rate of 130 USD on 12th March, Ripple falls to a price of 0.15 USD and the Bitcoin Forks fall dramatically. All Altcoins share a market share of “only” 35.9%, while the total market capitalisation falls dramatically. The focus of the crypto world in the coming days is clearly on Bitcoin.