The global panic over the spread of the coronavirus affects the economy in different ways. It has broken trade lines and caused massive transit delays and cancellations affecting the price of gold and oil. It has even managed to massively hit the blockchain.
After a few strong months, Bitcoin experienced a massive price dip over the last few days. It’s not a major cause for concern right now, but if the virus spreads like wildfire, and it’s already hitting Italy hard, it could spell worse news for cryptocurrency owners. Panic may make investors make wrong moves that could have an even worse effect on the price.
Two Days of Losses
Bitcoin’s price has dropped over 3% on February 25. This was the second day of massive losses for the leading cryptocurrency. According to experts, the latest price dip and losses on the global equities market are triggered by the fear of the coronavirus spreading to more countries.
China was a massive hotbed and the focus of infection in the past month, but now, the virus has already spread to Germany and Italy. Fears of a global pandemic have had a massive negative impact on the economy, even affecting the price of Bitcoin. Last week, BTC was selling for around $10,000 and currently, the price sits at $9,100. That’s a pretty big price drop which may go down even more if the coronavirus spreads in more European countries.
The key support at $9,400 is now broken, but traders expect a bounce at around $9,350. This might be the point of reversal that could send Bitcoin soaring back up and hold it at high volume. The situation is currently stable with experts not expecting further price dips. If the coronavirus panic continues, however, a fall down to $8,800 might erase up to 20% of Bitcoin’s gain since early February.
No one is currently expecting such a scenario, but it is possible. The more countries get hit with the coronavirus, the likelier the chances of massive Bitcoin price drops. There is a silver lining to it, though – the latest price drops are not affected by legal or market matters.
Traders Looking to Buy Low before the Halving
With the upcoming Bitcoin halving to take place in 76 days, traders are looking to buy lower. Some experts believe that the latest price dip was needed as Bitcoin and cryptocurrencies have entered overbought territory in recent weeks. A large pullback was needed to retest the underlying supports as everyone prepares for the next weeks and months.
The uptrend is currently intact even with the short-term bear run. Bulls are still on track to take Bitcoin to new heights. As soon as the coronavirus panic subsides, the uptrend should continue and see the leading cryptocurrency in the world return on the path to epic price highs.
Of course, everything’s speculative to this point. The Bitcoin market is highly volatile and things could change in a second.