After a strong start to the year, Bitcoin has once again fallen into a bit of a slump. While experts are not that concerned, traders are hit with bad news every week. Last week, for example, Bitcoin couldn’t break the $8,950 support level and this week, it went down to under $8,000. This is something no one expected as there were indicators that the price could jump up after a few weeks of sliding down.
We’re nearly halfway through March and the slump doesn’t seem to stop. The good news is that the last dip came after a 1-mile containment area was set around New Rochelle for 2 weeks due to the outbreak of the COVID-19 virus. The global outbreak has hurt Bitcoin and many expect the price jumps from earlier to continue as soon as the dust settles down.
The Plunge May be Caused by Traditional Markets Falling
The spread of the coronavirus has affected the prices of gold and crude oil resulting in the fall of traditional markets. Bitcoin couldn’t stay away from it. It seems that with each new containment area set anywhere around the world the price takes a hit as well. With no end in sight for the outbreak, the drops are expected to continue.
Governor Andrew Cuomo closed all schools and facilities for 2 weeks in New Rochelle, a suburb in New York City. The National Guard will help deliver food and water to homes and clean and disinfect public spaces as well. This is the only way to stop the spread of the deadly virus and many countries and states have adopted it. Italy, for example, is on lockdown right now as the situation has turned very serious. All of this has had effects on traditional markets and also hurt Bitcoin’s price which was soaring to new highs at the beginning of 2020.
A Number of Factors May be Behind the Slide
Fear, uncertainty, and doubt have sent traditional markets to plunge in the past few weeks. The coronavirus has paralyzed the world, leading to DOW falling over 2,000 points on March 9 alone. Oil markets suffered a major blow and Bitcoin was no exception.
Many experts attribute the combination of these factors for Bitcoin’s slump. No one expects further slides as the situation with the coronavirus outbreak settles down. Right now, governments around Europe and the US have taken drastic measures against the spread and it’s already giving results in Italy. Experts are hoping that the whole thing will settle down soon and when that happens, Bitcoin’s rise will most likely continue.
Bitcoin’s dominance rate on the cryptocurrency market stands at 63.8% with the market cap at $224.5 billion. The growth from the beginning of the year was no fad. Although currently locked in a bearish trap, bulls are widely expected to re-emerge once the coronavirus outbreak is dealt with. It might take a month or so, so let’s try to stay patient and calm and see how things play out.