The downward trend in the price of Bitcoin is still on, and today to be specific has not been a good day, as it lost 20 percent of its value in a matter of minutes.
Bitcoin, which was once at $10k, has dropped to under $6k, which is its lowest since 2019.
Since Bitcoin is the anchor cryptocurrency, all other major altcoins have also been affected, with bitcoin cash losing up to 30% of its value.
Most financial analysts believe that the Covid-19 coronavirus outbreak is to blame for the economic breakdown that has affected most sectors including the price of Bitcoin. Traditional markets such as stocks have been adversely been affected by the coronavirus.
Bitcoin, which was perceived as digital gold or safe haven, is now a victim with many investors selling out their assets, in case the economy faces further recession. With the much-expected uncertainty with the virus spread, many investors prefer other kinds of investments such as gold, or traditional investments such as bonds and treasury bills.
Cryptocurrencies are not the only ones that have been affected, Major sectors have been affected affecting the price of stocks and Gold. The US stocks have experienced the lowest low in a long time since the pandemic.
According to economists, coronavirus is expected to lead to a further recession, which will lead to the second global financial crash since 2018. It is expected that the bitcoin price will continue to drop, as there is no hope that the virus will stop spreading.
The current drop in value indicated that more than $50 billion has been lost since the start of the month. So far, it is one of the most severe crashes that bitcoin has experienced since 2017.
By the bitcoin price dropping, it means that the support level has to go lower. There are chances that the support level will go lower and lower, as users anticipate the May halving event. Initially, there were predictions that the halving event will create more scarcity that will make the demand high, and in turn, the price of bitcoin to be high. With the continued spread of the pandemic, however, it is hard to predict the effect of the halving event. Currently, investors are all eyes on the prices, some waiting to buy bitcoin when the price is low.
Image from Flickr
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