As the Coronavirus expands in Europe, Japan and South Korea and stock markets react to it, many investors are now asking whether the current price drop experienced by Bitcoin (BTC) and virtual currencies could be related to it. Nonetheless, the largest virtual currency is now being traded close to a critical support level that would give some time for bulls to enter again.
Bitcoin Traded Close To $9,500
The first month and half of 2020 were very bullish for the crypto market. Digital assets experienced massive gains that allowed some of them to get close to their all-time highs. Meanwhile, Bitcoin reached $10,500, the highest price since September 2019.
As the cases of Coronavirus continue to grow around the world, stock markets are experiencing massive losses. For example, the Milan stock exchange fell by over 5% as some regions close to Milan have been heavily affected by Coronavirus cases and deaths.
In Europe, the FTSE MIB fell by 0.7% on Tuesday after registering a 5.4% on Monday. This was the worst performance in the last three years. Meanwhile, in the United States, the Dow plunged 1,000 points on February 24, registering the worst day in two years.
The main difference between Bitcoin and other assets is the fact that it does not correlate with any macro asset. This shows Coronavirus or the spread of this disease shouldn’t be a reason for Bitcoin to trend lower or higher, at least in these first months of the expansion of the virus.
Bitcoin is a unique asset and it is not behaving in a similar way as other traditional markets. Nonetheless, this could change in the future if Bitcoin becomes a store of value or if traditional investors massively enter the space. This could certainly have an influence on the price of Bitcoin and how this virtual currency behaves in the market.
At the time of writing this article, Bitcoin is being traded close to $9,600 and it has a market capitalization of $175 billion. Nonetheless, it registered a 1.96% drop compared to 24 hours ago.
Altcoins, however, have been the most damaged virtual currencies in the recent sell-off. Ethereum, for example, is falling by 3.44% followed by XRP with a price decrease of 2.93% and Litecoin (LTC) losing 2.42% of its price.