The price of bitcoin – the world’s number one cryptocurrency by market cap – has fallen to just over $6,800 at the time of writing following news that the oil market in America tanked two days ago.
Bitcoin Takes Another Tumble
Despite spending the last several days trading above the $7,000 mark – which it had crossed for the second time in a month – the digital asset that everyone has come to know and love is once again being affected by outside market commodities and has taken a turn for the worse. The good news is that the drop isn’t huge; while BTC had fallen to $6,700, it has since recovered more than $100.
An expiring oil futures contract set for May delivery ultimately fell into negative territory, marking the first time in history that such a contract has done so. Oil has been hit hard over the past month following an all-out war between OPEC and Russia after the latter nation said it was reluctant to potentially lower its daily oil barrel production rates.
Both parties have since come to an agreement, but now it’s looking like the damage was done, as bitcoin wasn’t the only asset in need of medical care. Other cryptocurrencies, such as Ethereum, dropped by more than ten dollars in the span of an hour, leading to widespread uncertainty throughout the space.
On top of that, stocks also took a tumble with the Dow Jones collapsing by nearly 600 points. The fact that everything ultimately fell together raises more evidence of a longstanding argument: that bitcoin moves in correlation with stocks and other tradeable assets. When they drop, it drops, and when they spike, bitcoin will follow suit.
What are serious traders and analysts to think? As it turns out, the world’s primary cryptocurrency is experiencing very shaky conditions following the spread of the coronavirus pandemic, which first poked its ugly head out from beneath the rubble in late 2019. Since then, bitcoin has been on something of a roller coaster ride, at first spiking like nobody’s business. The asset drove itself into the $10,300 range, reaching a high for the year and giving many people a lot of hope about the future.
How Long Is This Going to Last?
Sadly, this wasn’t meant to be. COVID-19 has seemingly continued to exacerbate market conditions, driving stocks, oil and crypto into the ground and leading many people to seek out cash as protection against failing market conditions. To obtain that cash, many have sold other assets to ensure they can maintain a certain level of wealth.
Despite showing strength and resilience over the past few weeks, bitcoin is still enduring a hard time, and it looks as though it will continue to do so granted other assets remain in the dark.