- Bitcoin's price dropped 4% overnight as markets cooled towards BTC.
- But investors suggest this is in line with historical patterns.
- Wall Street suffers as COVID records continue to be broken.
It was going to happen at some point, right? Bitcoin’s blistering run from $4,700 in March this year to a peak above $18,000 yesterday hit a wall.
The price pulled back 4% quickly to settle below $17,500 for now. But market watchers have been quick to highlight that this is all part of the Bitcoin experience.
Peter Brandt took to Twitter to point out that during the last bull market from 2015-2017, there were no fewer than nine market corrections in the run-up to the mythical $20,000 all-time high.
This year however, there have been just two, suggesting there may be more to come.
But Bitcoin investor PlanB said this time things were different. He/she/they argued that the topsy turvy volatility of old is unlikely to trip up investors this time, due to a change in who is buying BTC.
The surge in investment from Wall Street and other financial hubs gives this bull run a distinctly more corporate feel, fueling the surge of new Bitcoin addresses being created.
Peering at the Fear and Greed Index, sentiment is the highest since records began, hitting 94, suggesting people see the dip as a moment to double down rather than sell up.
With Bitcoin’s dominance above 66%, the news of its drop pushed the global crypto market below the $500 billion mark, with all the top 20 cryptocurrencies by market cap seeing prices turn red.
But the pullback has been a boon for futures markets. The oscillator index - which looks at two different moving averages to get an indication of whether an asset is being over bought or oversold - has moved further into the “buy” category, and the moving averages sentiment is now in the “firm buy” category.
These two indicators suggest that investors don’t feel the correction is a signal that Bitcoin is overvalued, and that there’s another push higher still to come in 2020.
Wall Street Woes
The same can’t be said over in the stock markets. It was another day of doom and gloom for traders despite more signals that multiple vaccines are all bearing fruit in the fight against COVID.
The FTSE was down nearly 1% in early opening, the DAX fell 0.7% in Frankfurt and the CAC 40 slid 0.6% in Paris. The Europe-wide Stoxx 600 index fell 0.7%.
Over the US markets, as Trump drags out his doomed attempt at recapturing the White House and COVID cases continue to break records, the markets are coming with the idea that the economic damage wrought by the pandemic may become permanent.
S&P, Dow and Nasdaq futures were all down as a result, with crude oil also continuing is slide back to the low $40s as economies struggle to find their feet.
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