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Back to the Bear Market – COVID19 Takes No Prisoner

During the past 24 hours, Bitcoin has fallen through a series of supports, wiping away more than 40% of its USD valuation in a blink of an eye. The COVID19 takes no prisoner, wreaking havoc across the global markets. Casualties were not only limited to the equity and crypto market, but a safe-haven asset like gold is also slightly injured from the sell-off. Bitcoin failed to hold important long-term support at $6,400, which dated back to the 2018 bear market and headed to test the ultimate low at $3,000.

The trading activities were suspended again for the 2nd time in two days. The Dow Jones Industrial Average (DJI) is down 9.9% from the previous day, closed its trading day at 21,200.62 points. Only this week alone, DJI is already down more than 22%, marking the past 4 days as worst performing week in history since the Black Monday stock market crash in 1987.

Facing similar fate, the S&P500 (SPX) is down 9.5%, ended the day at 2,480.64 points. While the Nasdaq (NDX) plunged 9.4% and closed at 7,201.80 points. It would not be too early to announce that ‘the recession has arrived’ and we are entering a bear market after an eleven-year-long bull rally for the US stock markets.

Gold, considered by many as a safe haven asset and a hedge to any crises, still keeping most of its YTD gain intact, suffering a minor loss. At the time of reporting, gold is hovering above $1,580 per troy ounce with the daily swing low at $1,550 per troy ounce.

The Federal Reserve (Fed) has intervened in an effort to clam the market by injected more than $1 trillion dollars into the banks, desperately trying to keep it above water. As investors blindly seek safer assets, the Fed sought to ensure that the US Treasury bond market will be able to operate smoothly as demand grows. 

To mitigate the effect of Covid19 on the economy, the European Central Bank (ECB) made a decision to keep the interest policy rate at 0% before announced the injection of 1.2 billion euros as a quantitative easing (QE) measure to stimulate the market until the end of this year.

The king of cryptocurrency, Bitcoin, took a full-on nosedive while shredding all important supports along its way down. Bitcoin dipped beyond $4,000 creating a temporary low at $3,800 before some buyers stepped in and brought the price back up above the $5,000 level. The 2018 bear market’s low for Bitcoin is at $3,128, according to the data on Coinbase, if Bitcoin broke below the previous low, we could expect to resume a long and cold crypto winter.

On the other hand, Ethereum the second-largest cryptocurrency, broke $100 level and saw the two-digit price for the first time since Dec 2018. The last known support for ETH is at $80 which we came really close on touching it earlier today.

The Covid19 is now an official catalyst of the 2020 global recession.

You may also want to read: Plus Token Moves Stolen Funds as Bitcoin Price Plunges

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

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