The recent crypto market crash has been a huge hit for any cryptocurrency enthusiast, even long-term holders. The 51% drop in less than 24 hours is now ranked as the biggest crash in the history of Bitcoin but it doesn’t mean the digital asset is dead.
Clearly, the crash happened due to Coronavirus fears and the crash in the traditional markets. The Dow Jones Industrial Average plunged 2,997 points in its biggest drop since 1987. Similarly, the S&P 500 Index also dropped tremendously even after the US Federal Reserve tried injecting $1.5 Trillion in Bid to prevent further crashes.
Traditional Stock Market More Volatile Than Bitcoin
For the past few weeks, the traditional stock market has seen huge levels of volatility. VIX, the volatile index of the S&P 500 has been hitting all-time highs almost every single day.
As the Co-founder of Morgan Creek Digital, Pompliano, puts it, the 51% Bitcoin drop was less volatile than the S&P 500 drop of 9.5%.
Since then, Bitcoin has seen a significant 57% bounce up to $6,000 but was stopped at that level by the bears two consecutive times. Bitcoin is currently trading at around $5,263 after the second $6,000 level rejection when the Federal Reserve announced they would be dropping interest rates level to zero.
Where is Bitcoin Headed Next?
It’s extremely hard if not impossible to predict where Bitcoin or the crypto market is going next. Clearly, the fears around the Coronavirus and its consequences are playing a massive factor in the market right now.
A lot of countries have already closed their borders and some of them were forced to enter a lockdown where people cannot go out if it’s not an urgent matter. This has a huge impact on local but also international companies and it’s driving the global economy down.