Over the years, people have realized that Bitcoin is a store of value and can be used as a hedging tool to hedge against market fluctuations. However, in the current ongoing market turmoil, this is not the case. After the oil price plummeted on Monday, the world’s largest cryptocurrency continued to plummet at an alarming rate. After finding resistance at $7,200, BTC quickly dropped to $6,800 per token yesterday. As the market turmoil continues, it remains to be seen whether it can successfully recover today.
Oil plunge triggers BTC sell-off
On Monday, oil prices plummeted due to increased concerns about oversupply by traders and institutions.Traders began to reduce their positions in the West Texas Instant Contract, thereby Cause oil prices to plummet. Oil prices fell to a negative number, indicating that the entity was charged for obtaining oil from distributors. The historical sell-off caused the collapse of financial markets around the world, and in this regard, Bitcoin is no exception. Global stock markets fell, and the Dow Jones Industrial Average also opened lower this morning.
Nowadays, the stock market has begun to have a certain correlation with the price trend of Bitcoin, which is once again seen as a simultaneous decline of the two. The sharp decline in the crude oil market has also had a profound impact on the stock market, which has been dragged down by the sell-off caused by the coronavirus pandemic.
In addition, BTC will hold a halving transaction in less than a month, and traders may consider the possible impact of market conditions on this event. In the past, BTC experienced price increases after the halving event, but it is uncertain whether it can be achieved under the current circumstances. In the coming days, investors and traders may pay close attention to Bitcoin as it tries to restore lost land.
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