Over the years, it became accepted wisdom that Bitcoin was a store of value, and that it could work as a hedge against market fluctuations. However, this has not turned out to be the case during the course of the current prolonged market turmoil. After the oil price crash on Monday, the world’s biggest cryptocurrency has continued to slump at an alarming rate. After having found resistance at $7,200, BTC soon plunged to $6,800 per token yesterday, and it remains to be seen whether it can manage to recover today as the market turmoil continues.
Oil’s Plunge Triggers BTC Sell-Off
On Monday, oil prices tanked as oversupply fears grew among traders and institutions. Traders started winding down their positions in the West Texas Immediate contracts and thereby sent the price of oil crashing. The price of oil sank into the negative territory, which indicated that entities were being paid to take oil from distributors. The historic sell-off resulted in a collapse in the financial markets all over the world, and in this regard, Bitcoin did not prove to be an exception. Stocks declined all over the world, and Dow Jones Industrial Average opened lower this morning as well.
The equities markets have now started to have a correlation of sorts with the price action in Bitcoin, and that was seen yet again as both declined in lockstep. The massive decline in the crude oil market has also had a profound impact on the stock markets, which were already reeling from the sell-off brought about by the coronavirus pandemic.
>> Bitcoin Halving is Coming Soon: What to Expect Now?
In addition to that, BTC is going to have its halving event in less than a month, and traders are likely considering the possible effects of the market situation on that event. In the past, BTC experienced a bump in price after a halving event, but there is uncertainty whether this will be able to happen under current circumstances. Investors and traders are likely to keep a close eye on Bitcoin in the coming days as it tries to recover lost ground.
Featured image: DepositPhotos © alexeys
Risks and Disclosure:
Information provided in this correspondence is intended solely for informational purposes and is obtained from sources believed to be reliable. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained on this website is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions made or suggested and the actual results.
All statements and opinions expressed are the opinions of the author and not of Cryptocurrencynews.com or its officers. The author is wholly responsible for the validity of all statements. Cryptocurrencynews.com was not involved in any aspect of the article preparation. The author was not paid by Market Jar Media Inc for this article. The author did not pay Cryptocurrencynews.com to publish or syndicate this article.
This article does not constitute as investment advice. Each reader is encouraged to consult with his or her individual financial advisor; any and all actions taken by a reader as a result of the information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Cryptocurrencynews.com’s terms of use and full legal disclaimer. This article is in no way a solicitation for investment. Cryptocurrencynews.com does not render general or specific investment advice. Any information on Cryptocurrencynews.com should not be considered a recommendation to buy or sell any security. Cryptocurrencynews.com does not endorse or recommend the business, products, services or securities of any company mentioned on Cryptocurrencynews.com.
Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks, and options may fluctuate, and, as a result, clients may lose more than their original investment and possibly their entire investment. Any content on this website should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.
Please see our full disclaimer here for additional details before making any investment decisions.
