The last two days have been a whirlwind for those with stakes in Bitcoin and the broader cryptocurrency sphere; following a steady period at the $7,700 mark, BTC took a nosedive on Thursday, breaching the $6,000 threshold.
This crash is seen by many as being in sync with traditional stock markets suffering their own setbacks due to a chain of events: the coronavirus outbreak, the emerging oil crisis, Tom Hanks revealing his infection alongside his wife, the halting of major sports events, Trump’s travel restrictions from Europe, and oil prices sinking further.
As the U.S. markets' future indicators took a severe hit, so did Bitcoin .
Since our last market update, BTC's outlook got bleaker, momentarily dipping to an alarming $3,800 (and even lower on some platforms due to technical hiccups and liquidity shortages) as you can observe in the chart below.
This brought the horrifying reality that Bitcoin's value was halved at yesterday’s worst point within a single day. Ethereum mirrored this downfall, fleetingly dropping below the $100 benchmark for the first time since the bear market of 2018.
As a previous Blockonomi article clarified , the weaknesses in the crypto market, beyond just Thursday's chaos, can be pinned to several factors:
- According to Raoul Pal, an ex-Goldman Sachs executive, Bitcoin’s expanding price swings have compelled hedge funds and institutions involved to unload their holdings to minimize risks.
- Bitcoin miners have begun to stash their coins. ByteTree's founder, Charlie Morris, notes such behavior historically coincides with downturns and signals weaker market interest.
- The people behind the supersized PlusToken scam have started transferring Bitcoin to trading platforms.
- Liquidity strains in the market appear to be stemming from the coronavirus pandemic.
Thankfully, some stability is returning to the crypto scene, with Bitcoin maintaining levels above $5,500 recently as global markets start their recovery from a near 30% decline. Nevertheless, a few voices have warned that thin market volumes could pave the way for renewed volatility.
Not the End of the Line… Yet
While a number of players in the crypto arena were on the verge of quitting when Bitcoin briefly dived below $4,000, this doesn’t spell the end just yet for Bitcoin and its peers.
Nunya Bizniz pointed out that after the market rally succeeding Thursday's slump, the cryptocurrency has climbed above the crucial 200-week simple moving average — a mark it hasn't dropped beneath in its decade-long history. Bizniz suggested that $3,800 “might prove to be among the ultimate entry points.”
Indeed, even though Bitcoin dipped under the 200-day moving average, it hasn't closed a session above this ascending trend.
BTC Weekly:
The recent falls below the log curve (in blue) and the 200 week MA (in red) were twice as sharp as the next closest drop.
This moment might eventually be one of the premier buying opportunities. pic.twitter.com/M4tHCIdboC
— Nunya Bizniz (@Pladizow) March 13, 2020
Additionally, expert Moe noticed a tremendously optimistic candle formation on Bitcoin's three-day chart: the TD Sequential presented a nine candle, which commonly signals a potential reversal in price.
Even the renowned whistleblower Edward Snowden has a positive outlook on Bitcoin. He recently tweeted that he believes the cryptocurrency's abrupt price crash is unfounded.
In the past decade, Snowden utilized Bitcoin for his whistleblowing activities, and he has virtually spoken at numerous industry conferences, praising the efforts toward decentralization and making currency more “liberating.”
