While the traditional financial markets are reeling the world over, with panic selling so bad on the NYSE that a circuit-breaker has been triggered (no trading for 15 minutes), Bitcoin is also feeling the pinch. Down 9% since Sunday morning 9 March, some analysts believe PlusToken scammers are to blame for the crypto drop. CoinDesk are reporting that the scam operation liquidated $100 million on Sunday causing a market wide sell off in the cryptoasset markets.
CoinTelegraph’s newswire is reporting that the abrupt correction took place as DOW, S&P 500 and oil futures plummeted as investor fears over the economic impact of the coronavirus continue to intensify.
COVID-19 FEARS GRIP WORLD ECONOMIES
Dow futures dropped more than 1,200 points (4.6%), S&P 500 futures fell 4.89% and Brent Crude fell 30%. The volatility in oil futures appears to be driven by a growing disagreement between Saudi Arabia and Russia as the OPEC members debate whether or not cuts to crude oil production should increase as demand weakens across the globe.
Despite being fully aware of Russia’s disapproval, Saudi Arabia is reported to have finalised plans to increase production and this is leading investors to fear that a price war is in the making.
On March 8, the Italian government also announced that it would extend quarantine-like conditions to its northern region. This effectively means that nearly 16 million people are now severely restricted in their movement as bars, schools, sports competitions and travel is shut down. As Cointelegraph has reported, Italy has been especially hard hit by COVID-19 and to date 366 have died and more than 7,000 have been diagnosed with the virus.
On the same day, France also banned all gatherings of more than 1,000 people in an effort to stem the spread of Coronavirus as 19 people have already died and more than 1,126 have been infected.
BITCOIN AND CRYPTO NOT SPARED IN BLOODBATH
The Bitcoin price has not been spared the carnage inflicted upon equities markets and at the time of publishing the digital asset is plunging below $8,000 to mark a new low at $7,675.
Data from Skew shows $92 million in leveraged positions were liquidated and the Crypto Fear & Greed index shows a reading of extreme fear (17), a low not seen since Dec. 18, 2019.
Crypto Fear & Greed Index. Source: Alternative.me
Currently, Bitcoin trades near $7,850 and if the price fails to hold here a drop to $7,600 is expected. Below $7,600 the volume profile visible range (VPVR) shows a high volume node at $7,422 and Bitcoin’s price history shows this zone functioning as support since November 23, 2019. This would confirm SA Crypto’s mid-term projection for a pullback as recorded in our recent Market Analysis video.
As the Bitcoin price corrected, altcoins also suffered major losses. The majority of top-20 altcoins followed suit, dropping by double digits. Ether (ETH) corrected 13.67% and pulled below $200, Bitcoin Cash (BCH) dropped 17.67%, and XRP lost 12.17% of its value.
Bitcoin daily price chart. Source: Coin360
The overall cryptocurrency market cap now stands at $223.5 billion and Bitcoin’s dominance rate is 63.9%.
This could well be the world economy’s market correction that crypto enthusiasts have been predicting for some time now. Very few however would have predicted it all being sparked by a flu-like virus.
It gives a whole new meaning to “when the USA sneezes, the world catches a cold.”
In this case, it’s “when China sneezes, the world catches a cold.”