If the Coronavirus epidemic and Saudi Arabia oil price war continue to spread and hurt global market growth, Bitcoin could fall by as much as 20 percent in an hour.
That is according to Alex Krüger, a prominent market analyst who cast doubts over bitcoin’s ability to serve as an insurance against a global financial meltdown. His statements came as the cryptocurrency registered its biggest daily loss since September 2019 on the day that saw stock markets collapsing and oil prices crashing by more than a fifth.
Bitcoin plunges to a one-month low as oil prices crash by 30% | Source: TradingView.com, Coinbase
Krüger noted that bitcoin’s big decline could come any day as the global market sentiments continue to deteriorate. He suspected big traders for their potential to escalate the next cryptocurrency crash, stating that they could either liquidate positions, panic-sell, or park their funds in other asset classes.
“[Bitcoin] in this environment can drop 20% in an hour,” said Krüger. “It could come out of nowhere, as large whales panic or decide to liquidate positions to cover margin calls or hunt for bargains in other asset classes. No analysis of the past will uncover this.”
At present BTC is $7,905...but in my future scope BTC will go back-up at a resistance of $8,500 then short the corn again to $7,800 for awhile, then pushback to $7,400 before it will plummet to $6,900 anytime soon..
A Better Loser
For instance, the cryptocurrency as of Monday was down by more than 26 percent from its year-to-date top. At the same time, the US benchmark S&P 500 index has plunged by up to 15.84 percent against the Coronavirus fundamentals. Even the latest Saudi Arabia oil price war crashed bitcoin more than the FTSE 100, the FTSE MIB, and the Nikkei stock index.
“It is another proof that Bitcoin is NOT a good hedge vs risky assets in risk-off episodes,” said Nouriel Roubini, the economist who famously predicted the 2008 financial crash. “It actually falls more than risky assets during risk-off. So BTC is a shitty shitcoin hedge in risk-off cases.”
Meanwhile, bitcoin’s biggest mainstream rival Gold closed above $1,700 for the first time in about seven-years, projecting itself as a better safe-haven against the ongoing financial collapse.
Global mkts in PANIC mode: Oil prices crashed, equities plunged, currencies & bonds saw wild moves as a full-blown price war in crude adds to coronavirus worries. Nikkei dow almost 6%. US 10y yields <0.5%. Brent Oil at $32/bbl. Gold $1673. Bitcoin in turmoil as well, plunged <$8k
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Hopeful Bitcoin Bulls
The founder of the now-deceased MegaUpload said Monday that both gold and bitcoin could benefit from a stock market crash, thinking that equities and cash are overvalued.
“Prepare for the worst economic crash since the Great Depression,” said Mr. Dotcom. “Sell stocks and fiat currencies while they still have some value. Buy Crypto and Gold. Do it now. Trust me. This is not a drill.”
Part of the bullish sentiment also came from analysts that rely on a so-called Stock-to-Flow model that predicts the bitcoin price at $100,000. Despite its plunge below $8,000, they see the cryptocurrency on its track to achieve a six-figure valuation. S2F creator PlanB, for instance, tweeted:
Bitcoin was trading at $7,872 a token as of London noon, down 2.19 percent into Monday.
Yashu Gola
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including NewsBTC, FxDailyReport, Bitcoinist, and CCN...
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