Bitcoin at 9000 USD
The downward trend of the previous days continues on Wednesday. After Bitcoin had to give up the important support area at 9400 USD, the price only knew one direction. The next few hours will show whether the bears continue to set the tone. We take a look at the current market situation and the possible triggers for the dump.
Will the support hold?
At the time of writing, Bitcoin is trading at $9017 USD and investors are watching with interest to see if the support area will hold at $9000 USD. A glance at the order books suggests that a pullback below the USD 9000 level is imminent. This would send the No.1 crypto currency back to its January levels. The high 24-hour volume of just under USD 45 billion illustrates the tense mood. In addition, the Bitcoin Dominance Index has reached a value of 65% again after a long time. The focus of investors is clearly on digital gold.
The Altcoins will be hit even worse than the BTC on Wednesday. Ethereum rushes with a price drop of a whopping 11% to a value of USD 224 and loses important market share. The Bitcoin Forks Bitcoin SV (- 14 %) and Litecoin (- 14 %) are falling behind Tether and Ethereum Classic is the worst in the top 20 with a price slide of just under 18 %. We are witnessing a real “Altcoin bloodbath” in these hours, where volatility is showing its unpleasant face. In addition, the current slide makes it clear how dependent alternative assets are. The price losses are a multiplier of the Bitcoin dump.
Total market capitalization declines
The total market capitalization falls to a value of approximately USD 252 billion on Wednesday. Uncertain investors are pulling their capital out of the crypto market and the hype of the past few weeks is gradually fading in the shadow of the enormous sell-offs. But what are the reasons behind the crash?
The coronavirus is spreading in Europe, North America and other continents, while many cities in China are reaching an absolute state of emergency. Worldwide, the pathogen has already been diagnosed in over 80,000 cases and the death toll is rising. Meanwhile, traditional markets are reacting to the news with sharp downtrends. The Down Jones Industrial reached a 2-year low this week, the DAX reached a new annual low and the S&P 500 lost a whopping 3.4% yesterday.
Bitcoin not a “safe haven” after all?
On January 25th the celebrations for the “Year of the Metal Rat” started in China, while Corona reports from Wuhan caused unrest. As a result, Bitcoin prices rose and traditional markets fell. Many experts interpreted this as a direct correlation between the price of Bitcoin and the Covid-19 news, and indeed, Bitcoin’s benefits were seen when the Chinese government quarantined billions of yuan in cash. However, Asian nations have been using cashless payments for some time, so a direct effect on the Bitcoin price can only be suspected. The current dump, on the other hand, suggests that the crypto market may be influenced by traditional markets.