Veröffentlicht: 11.06.2020

Panic in the traditional markets pulls Bitcoin down

Dow Jones and Co. with heavy losses

A look at the Dow Jones Industrial Average illustrates the fear of a second wave of coronavirus. After the Fed forecast a long phase of zero interest rates, the major stock markets crashed. In the evening, a loss of 6.21 % was recorded. Prior to this, the DAX had to close with a daily loss of 4.47 % below the important 12,000 point mark. The economic recovery can be very slow. We take a look at the possible consequences.

Dumping cryptos

After the third Bitcoin Halving Event we could observe an encapsulation of the No. 1 crypto currency. The market leader climbed over the magic 10000 USD barrier and pulverized several resistances in passing. However, the current price slump shows how dependent the BTC is on the major stock indices. After the Fed meeting, the crypto currencies reacted with high volatility.

Bitcoin price current

At the time of the article, the BTC is quoted at USD 9320, a fall of 5,40 %. From a bullish perspective, the next hurdles are now at USD 9400 and USD 9600. On the downside, the trend line at 9300 USD forms the current support area. On Thursday, the trading volume is at a “normal” level of just under $30 billion.

Long-term advantages for crypto currencies

The sobering economic outlook could drive investors into alternative assets in the long term. Experts repeatedly attest Bitcoin gold-like properties. Due to the low inflation rate, the limited availability and the fast transaction speed, the digital currency is recommended as a crisis-proof store of value. The statistics on futures contracts also reflect the enormous interest of investors. Whether staking, lending or mining, the crypto space is brimming with interesting income options. It is quite possible that many investors will be moving their capital in the coming years.

That is why volatility is so important

Again and again the term “volatility” is directly related to crypto currencies. Volatility is derived from the Latin word “volatilis” and means something like “flying” or “volatile”. In economics, the term refers to the standard deviation of changes and is often used as a tool to determine the measure of risk. In the crypto world, volatility provides an important measure of how the value of an asset changes over time. In theory, a distinction is made between absolute change, relative change and logarithmic change. All three methods are used depending on the circumstances.

The problem with volatility

When the Corona crisis plunged the traditional markets into the abyss in March, volatility settled like a lever on the cryptos. In a rush, Bitcoin rattled below the USD 5000 mark. In return, the high volatility had a positive effect on the BTC chart shortly afterwards. Hardly any other asset was able to recover so quickly from the consequences of the coronavirus pandemic.

A look at the Altcoins

Currently, the BTC Dominance Index is at 64.9 %. According to this, all Altcoins share a market share of approximately USD 93 billion, while Bitcoin has been setting the tone for months. On Thursday, most alternative assets also follow Bitcoin at every turn. VeChain (+11.32 %) and DigiByte (+11.10 %) may free themselves from the clutches of the first mover and record independent price outbreaks.

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