Bitcoin Seems Correlated with Crude Oil, is Trouble Imminent?
On April 20, crude oil incurred a momentous price decline by 99 percent. This unexpected decline increased the difficulties posed by the coronavirus pandemic. The difficulties are more in nations where fuel is 90 percent of all exports.
Due to correlation among traditional assets, the swift decline affected gold and SPX. However, when we examined the cryptocurrency markets, it was discovered that on the same day, Bitcoin incurred a 4.9 percent decline. Bitcoin experienced rejection at $7.2k price level. As at the time of writing, the price of the benchmark cryptocurrency was $7,553.16.
Based on the progressive correlation between Bitcoin and traditional assets, the future of cryptocurrencies is vulnerable. Many people were worried about Bitcoin’s 50 percent price decline on March 12 and their concern is about the narrative that Bitcoin is a safe-haven. The massive decline empowered these concerns.
After the massive decline, a renowned analyst John Bollinger tweeted about the current status of Bitcoin and the altcoins. According to him, a remarkable price correction is imminent and traders should get ready.
Recently, in a podcast, Christopher Brookins of Valiendero Digital Assets discussed the cryptocurrency space in nations that rely on revenue from oil. Little has been heard recently about the cryptocurrency space in these countries.
Nevertheless, the Israeli trading platform eToro notified its users in an email that Bitcoin hardly pulled back as negative oil prices shocked the traditional markets. That is, Bitcoin has been doing well, said eToro.
Contrariwise, Heath Tarbert of the CFTC talked about the wavering oil market and based on his forecast, both traditional and cryptocurrency markets were only revealing the current economic volatility.