BTC: When To Expect A Reversal

Major sell-off in the cryptocurrency market continues. The BTC/USD traded at $ 9100 at the end of last week. Since then, it has already slipped below $ 8000. It is worth noting that today the entire financial market is characterized by increased turbulence. For example, the volatility in the foreign exchange market doubled compared to the end of February and reached its highest level since the beginning of 2017. Such fluctuations are the result of investors’ panic, which in turn stems from the fact that the global economy is gradually plunging into economic chaos called the new financial crisis 2020.

The reason why the world economy is faced with rather unwelcoming reality is the much-hyped coronavirus outbreak, which continues to spread across the globe. In an attempt to tackle the spread of the virus, the governments introduce more stringent measures which leads to a decrease in business activity and puts limits on global trade. The number of confirmed coronavirus cases exceeded 120,000, and the death toll is now 4,200. The epidemic has spread to new regions of the USA and Europe, about 25 million people are under quarantine. At least eight US states, including New York, have declared a state of emergency. It is not surprising that amid these events, investors began to get rid of everything risk-related, and preferred safe-haven assets instead: bonds, yen and franc.

Some time ago, one might think that Bitcoin could become a hedging and protective asset during the instability in the financial markets. However, as you can see, traders prefer to stay away from the cryptocurrency market at the moment. They probably believe, that under current conditions it’s not safe to invest in cryptocurrency, especially when there is still the possibility of even greater sales in traditional markets. With that said, the long-awaited cryptocurrency reversal may be delayed indefinitely.

Many traders expect BTC growth after the upcoming halving event. In this scenario, until May the market will be dominated by a bearish trend, and the BTC/USD rate will continue to consolidate in a fairly wide range between $ 10,500 and $ 6,500. Not to miss the reversal, we recommend you to follow the changes in gold prices. Gold and BTC correlate well with each other. Even now, with BTC dropping, gold is demonstrating a similar trend.

Some market experts forecast that gold may begin its bullish rally any time soon. Another decision of the US Federal Reserve to reduce its key interest rate is expected to become the next growth driver. The meeting will be held on March 18. New stimulus measures will be aimed at supporting the economy by injecting cheap liquidity. We are talking about the pumping of the economy with new money, straight from the Fed's printing press. Such measures once again point to the vulnerability of traditional money, which is inflationary in nature. Unlike fiat money, gold and bitcoin are not subjected to the risk of inflation. That’s why the upcoming devaluation wars may be the best gift for those who keep looking for optimal entry points to buy crypto.