It’s no secret that the world is in turmoil about the current Corona Virus pandemic which is causing closures of public events, schools and all kinds of mayhem in many countries already. Ever-hungry for sensationalist headlines media outlets are spreading around the clock FUD news on how this outbreak is causing economic downfall in every corner of the globe and as a result, we are already experiencing the signs of a world-wide market collapse in the past few days.
The stock market dropped by over 25% and the crypto market is doing the same. Some coins are down by 40% this week, others even more. In the past day alone, we’ve seen a major drop of 24% in Bitcoin and of course, the whale of crypto is dragging the rest of the market with it.
As we know, when Bitcoin starts to crash, the fear grows and people are exiting their positions in alts as quick as they can which causes a chain reaction and subsequently, we see the altcoin markets drop significantly lower than that of Bitcoin. Which is happening right now.
As AMBcrypto reported, the drastic crash in the Bitcoin market triggered liquidations worth a whopping $487 million, taking the total liquidations for the day to $543 million. The sell liquidations were about $542 million, whereas only $14 million buy liquidations were reported by the data provider Skew markets.
The question on everyone’s lips right now is where does this end or where does it lead to?
I have drawn two possible scenarios in the chart below You can also find it on my trading view link here).
The first scenario is that we find support and stay above the long term support line that has been holding on for years already. This will see bitcoin possibly dip to around the $5K level (could be as low as $4800 in fact) and then begin its recovery phase in the run-up the upcoming halving.
The second scenario is that the current support doesn’t hold and we break below which can easily see us going down all the way to the $3k levels once again. Something that nobody was expecting to happen this year, but then again, noone was expecting a global pandemic outbreak to mess up the top world economies either.
I personally am confident that the current crypto collapse will pass just like the previous three did (remember, we had 2013-14, then we had two really bad ones in 2018).
What’s new this time is that with BTC crashing to sub-6k levels for the first time in a year, it’s become evident that it is no longer the safe hedge against economic collapse that people were hoping for. As it turns out, when
However, with S&P markets crashing much lower and the UK FTSE 100 dropping to pre-Brexit lows, world economies suffering lockdowns and overall mayhem due to the coronavirus, which is taking a toll on the investments markets and people are capitulating in fear, which is usually the retail investors – those are the first to pull out when the going gets tough.
If you have a strong hand and can brave the storm, it will be good. Those who succumb to FUD will be the sore losers. I think we need to be prepared for a few more weeks (maybe months) of bear market in crypto and those who were waiting to buy cheap Bitcoin should be ready to do so as soon as it drops to the lower support – if it goes down there. If we see Bitcoin break that support and goes lower to the 3500 levels, I consider that a great buy opportunity. BTC will recover soon after that.
It always does.