Crypto Markets Shed $38B This Week, When Bull Run?
The crypto markets have dropped more than $38 billion since Monday, Bitcoin and Altcoins have been in freefall. All of the top ten coins are in the red, leaving us asking when bull run?
Today’s close will determine if we have ended the crypto bull run or not
The crypto markets have had a rough week, dropping $38 Billion as capital fled the markets. Bitcoin has broken through two critical support levels, of $9500, and $8800, and is currently at $8722 at time of writing.
Altcoins have been getting battered this week also, Ethereum is down at a price of $225.84, at the time of writing. The second largest coin has been mirroring Bitcoin’s downward price action.
So far Bitcoin hasn’t closed under the 200 day MA on the daily chart, but currently we are below the 200 day MA. If we close beneath this critical support, we may have entered a bearish trend.
If we manage to close above the 200 day MA, we could see a bounce and continuation of the bullish trend. Today’s candle will be very important to determine which way price could go, short term.
If Bitcoin doesn’t bounce, it would be a departure from the price action leading into the previous halvings, which were surrounded by bullish anticipation. While Bitcoin and crypto are uncorrelated to traditional markets, they are risky and volatile investments which may see selling pressure in a crisis.
While crypto investors may see Bitcoin as a store of value, this sentiment may not be shared by speculators in traditional markets who also trade Bitcoin. They may sell crypto and park their funds in more traditional safe havens like gold or treasuries.
The traditional markets haven’t been doing too hot either
The Dow Jones had its worst day in history yesterday, and today it has fallen even more. This may be creating selling pressure on Bitcoin as traditional investors go into panic mode and manage risk.
Alternatively, Bitcoin and Crypto in general have been on a tear this year. This may simply be a retracement, before halving hype takes over again and sparks more bullish momentum.
The fall in prices of crypto coming in tandem with a bad week in traditional markets may have simply amplified bearish sentiment as investors react to market movements. Bitcoin’s narrative as a safe haven asset must be tested and proved, although currently it remains a safer investment than the DOW.
Do you think Bitcoin is a safe haven investment in times of economic crisis? Let us know in the comments!
Images via Shutterstock