- Support at current levels and price could go even lower to $8,200 but it is still a “normal bull market retracement level”
- After the S&P 500 lost nearly $1.737 trillion in the past two days, it rebounds while gold seeing flight into the safe haven
- Bitcoin and gold correlation over the past 30 days is negative indicating BTC has characteristics of both risk-off and safe-haven assets
The bears are holding strongly to the market as the prices took a hit yet again. Today, in yet another crash, Bitcoin price fell to $8,630 level briefly on Bitstamp and is currently teetering on the edge of $8,800, having broken through $9k.
The market is in deep red. Yesterday’s daily candle was closed below the monthly opening and now we have gone back to late-January levels.
“Heavier bids at 8.8k. I can stay solvent longer than the market can remain bearish. If it 8.8k caves, even heavier bids at 8.4-8.5k,” said trader CryptoGainz.
Altcoins to crash harder but expect to be completely wrong about Bitcoin
As bitcoin takes a fall, altcoins tanked. According to trader Cantering Clark, the “hard cold truth” is the altcoins that have been enjoying the rally until recently will “go on to make new lows, and repeat this pattern again.”
“As for BTC, always be prepared to be completely wrong. A lot of trading in general is about preparation. When Bitcoin drops there is much more reflexivity in price because no one really agrees on a fair value. Price is what determines value, overthrow is then tremendous,” said Clark.
Meanwhile, trader Nik Patel sees BTC dipping into the 200MA at $8,900 and reverse or further drop to the 360MA and take out the stops at about $8,200.
Support is looking weak at current level and though price could go even lower, is still a “normal bull market retracement level,” says analyst Bob Loukas.
Amidst this bearish scenario, analyst Mati Greenspan gave a dash of hope to bitcoiners as he states, “the retracement off the February peak actually looks like a bullish flag from this angle.”
Risky assets struggling during a flight into safe havens
In the stock market, the S&P 500 has lost about $1.737 trillion in value in the past two days, according to S&P Dow Jones Indices’ Senior Index Analyst Howard Silverblatt.
After a four-day losing streak, stocks opened higher across the board Wednesday with 10-year Treasury yield also retreating from its record lows.
Risk assets are struggling as coronavirus cases continue to climb steadily outside the epicenter in China.
“The ultimate impact remains entirely unknown at this stage,” said Eleanor Creagh, a Sydney-based strategist at Saxo Capital Markets. “And uncertainty is the enemy of conviction.”
Gold also rebounded on Wednesday after it hosted its biggest one-day decline in about four months. However, it has been expected that the safe-haven hasn’t reached its peak yet, with the possibility for another Fed rate cut by 25 basis points becoming certain.
“It is a typical flight into safe havens after the coronavirus has spread not only to the Asian countries but also to Italy and Middle East,” said Peter Fertig, an analyst at Quantitative Commodity Research.
Bitcoin both risk-off and safe-haven asset
Bitcoin is doing badly in the current environment, meanwhile, it has the arguments that the digital currency is a safe haven during turmoil has been shattered.
Coin Metrics also found that the correlation between Bitcoin and gold over the past 30 days has been negative, “adding evidence to the thesis that BTC only reacts to certain types of events and not others.”
One explanation to this could be that it COVID-19 is more of a macroeconomic shock than an uncertain geopolitical situation, meaning, “perhaps BTC has characteristics of both risk-off and safe haven assets with a truly unique reaction function.”
“Bitcoin just picks the status as an alternative asset when other things look crowded,” said Mark McCormick, global head of currency strategy at TD Securities.
Meanwhile, crypto data provider Glassnode says, as per MVR Z-score, there’s still much room for bitcoin to rise to. The MVRV Z-Score is used to assess when Bitcoin is over or undervalued relative to its fair value and at current value, it says there’s much room to grow for BTC.
Author: Bitcoin Exchange Guide News Team