Bitcoin
Vaccine News Strikes Blow to Safe Haven Assets; Potentially Impacting Bitcoin
Cole Petersen | Nov 09, 2020 | 18:00
- The global stock markets are rocketing today on news that a vaccine that would put an end to the ongoing pandemic has 90% effectiveness
- This news signals that it may only be a matter of months before things start going back to normal, which means a reduction in government spending and economic turbulence
- Naturally, this is a bad thing for safe haven assets, with today’s news sending the price of gold nosediving
- Bitcoin has seen some downwards momentum as well, although it is mostly consolidating around the price at has been at for the past few days
- If BTC truly is a safe haven asset that trades more like gold than it does equities, then this news could strike a serious blow to its strength
Bitcoin is still trading within the mid-$15,000 region following a period of weakness throughout the past couple of days.
Following its rejection ta $16,000, bears sent its price plunging to lows of $14,400. At this point, it was able to reverse its descent and rally all the way up towards the upper-$15,000 region.
It has been consolidating ever since and may now be on track to see its volatility start ramping up as the global markets start moving based on the vaccine news.
Vaccine News Sends Stocks Flying; Strikes Blow to Gold and Bitcoin
News of Pfizer’s highly effective vaccine has moved the markets, sending stocks flying while safe haven assets trend lower.
While the benchmark stock indices all rallied multiple percentage points in their pre-market trading hours, gold’s price nosedived – seeing one of the latest single-day selloffs it has seen in quite some time.
Bitcoin has shown signs of being correlated to both stock and gold on separate occasions, making it unclear how this news could impact its price action. It has declined slightly today.
Trader: Vaccine News Possibly Bad for “Store of Value” Narratives
One trader hedged his Bitcoin long exposure after the news broke, noting that it could prove to be highly negative for safe haven narratives.
“Short hedged my BTC 1:1 on vaccine news. Gold dumped so hard it makes me think it’s bad for store of value narratives. Not net short just protected for spot exposure.”
Image Courtesy of SalsaTekila. Source: Assorted Charts from TradingView.
The coming few days should shine a light on whether or not Bitcoin’s independent technical strength will be enough for it to dodge the impacts of this news.
Featured image from Unsplash. Charts from TradingView.
