Bitcoin price started the week with a bullish rally, but it has now given back all of those gains. At press time, BTC is trading around $ 9.119, slightly down more 5% over the previous 24 hours.
BTC/USD 4 hours chart | Source: Tradingview
Bitcoin price and Stock market see a bloodbath
At 00:00 UTC on Wednesday, Bitcoin was changing hands around $9,624 on Coinbase. Price remained steady until 07:00 UTC when heavy sell volume sent Bitcoin to as low as $ 9,195. Bitcoin price is well below its 10-day and 50-day moving averages, which is a bearish signal for market technicians.
Indeed, major stock indices are all in the red Wednesday. In Asia, the Nikkei 225 of publicly traded companies ended the day flat, down 0.07%. Concern about increased coronavirus infection rates in Japan led to some selling pressure. In Europe, the FTSE 100 index dropped 3.1% Wednesday. The prospect of U.S. tariffs on U.K., French, Spanish and German goods dragged the index lower.
The U.S. S&P 500 stock index lost 2.6%. The round of stock selling has been attributed to concerns of the coronavirus pandemic’s resurgence in some states.
S&P 500 (blue), Nikkei 225 (red), FTSE 100 (green) and bitcoin (gold) in June | Source: TradingView
The number of new Coronavirus plague infections in many states is reducing hope for a smooth economic recovery. California and Florida have reported their largest daily spikes in new Coronavirus cases, while Houston says its intensive care unit bed is almost at full capacity. New York, New Jersey, and Connecticut also require visitors from several hotspot states to be quarantined for 14 days.
Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, stated:
“The market has been optimistic that the economy is re-opening and that life would get somewhat back to normal, but the virus may have other ideas. The market has again gotten caught up in the crossfire of increasing numbers of Covid-19 cases, trade protectionism, and politics.”
Measures to prevent epidemics, restrict travel, and shut down the economy made trade and markets, including Bitcoin, strongly affected. Besides, many political instabilities between the US and China, along with North Korea, may cause negative reactions to the financial market in general.
It seems like this is a market sell-off triggered by intensifying worries about a Coronavirus resurgence.
Bitcoin miners selling BTC remains a threat
Apart from the expected increase in volatility, another variable in the short-term price trend of Bitcoin is the abrupt increase in selling pressure from miners.
Following a two-year high mining difficulty adjustment, miners have started to sell Bitcoin again. Selling from miners is a major source of external pressure on BTC, and the other is the sell-off of fees by exchanges.
If you know when the miner sends money to exchanges, you can infer when the #BTC price will plunge. The amount of BTC sent doesn’t matter when looking at the “Miner to Exchange flows.”https://t.co/3boWrnWUCw pic.twitter.com/OfmTkIiRYL
— Ki Young Ju (@ki_young_ju) June 24, 2020
As risk-on assets enter a phase of fear kickstarted by rising coronavirus infections and the possibility of a correction in the stock market, a confluence of Friday’s options expiration and recent miner selling could raise the probability of a steep pullback in the cryptocurrency market.
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