Bitcoin Bounces 7% Below $ 13,000 Along With Stock Markets
After climbing to 16-month high above $ 13,800, bitcoin price declines with equity markets amid lingering fears over coronavirus pandemic.
The price of the cryptocurrency today reached $ 12,980, thus retracing by 7% from the peak. According to a CoinDesk analyst, the market was overbought after it grew by 20% over the past month. However, the depth of today’s fall could also have been influenced by movements in global markets..
Wall Street’s leading index S&The P 500 is down more than 2% and the European Euro Stoxx 50 is down 4%. The risk aversion of investors has a positive effect on defensive assets such as the US dollar, Japanese yen and US government bonds. Thus, the DXY dollar index rose by half a percent to 93.50. Gold, also regarded as a defensive asset, fell 1.7% to $ 1,876.
Investor exposure to risk has eroded as the second wave of coronavirus accelerates across Europe and the United States, threatening to undermine the fragile economic recovery. The analyst admits that this factor will continue to influence the price of bitcoin, despite the preservation of positive fundamental metrics.
Just before the start of the latest move, CryptoQuant CEO Ki Yong Joo noted a decline in stablecoin inflows to exchanges. Stablecoin movements are often viewed as an indicator of the purchasing power of market participants..
“Fewer people began to deposit stablecoins on exchanges. Purchasing power declines in the short term (72 hours), ”he wrote.
In addition, the level of $ 13,900 remains of particular importance, which acted as resistance in July 2019 and support during a pullback from historical highs around $ 20,000. In any case, the decline is currently limited only by yesterday’s values.
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