Bitcoin is falling due to the spread of the Corona virus, hitting its lowest level in almost a year

Bitcoin, the world's largest cryptocurrency, fell below $4,000 during trading last Friday, while it had started the week above the $9,000 level, to lose more than 30% from its value on Friday, recording the worst daily performance in seven years, reaching its lowest level since March 2019 at $3,850, losing nearly half of its value over two days.

The drop below $4,000 was brief as the currency quickly rebounded to later trade around $5,400, and bitcoin futures were making an accelerating bearish streak, marking the worst weekly decline since its appearance in December 2017. .

Bitcoin was trading near the $10,000 level in mid-February, and since then it began to gradually decline rapidly as the spread of the deadly Corona virus worsened, coinciding with the decline in global financial markets.

Many analysts are of the opinion that the recent price movements of Bitcoin XM Arabia Mainly driven by the exacerbation of the widespread spread of the Corona virus, which is affecting very strongly global markets by pushing investors to traditional safe investments and abandoning risky assets, and with this sharp decline, Bitcoin has lost its attractiveness as a safe haven asset, so it is too early to associate Bitcoin with other asset classes. .

Bitcoin

Bitcoin

The massive losses incurred by Bitcoin came amid high volatility in the US stock markets, which witnessed the worst daily performance since Black Monday in 1987, but recovered after the Federal Reserve announced more stimulus plans.

The volatility in the foreign exchange markets doubled at the end of February and reached its highest levels since the beginning of 2017, resulting from the panic of investors, which stems from the well-established fact that the global economy will gradually fall into a state of economic chaos called the new financial crisis 2020, due to the spread of the Corona virus in All over the world, governments are trying to tackle the severity of its spread by taking stricter measures that in turn lead to reduced business activity, restrictions on global trade, quarantines of entire cities and travel bans.

Bitcoin collapses in light of resorting to safe investment havens

It is not surprising that these frightening events made investors think about getting rid of everything related to global risks, and preferred to resort to safe assets such as gold, bonds, Japanese yen and Swiss franc.

Although many investors expect a further decline for Bitcoin, the belief that Bitcoin will recover is the closest to the possibility, because stocks returned to recovery after announcing a package of monetary stimulus, at the same time Bitcoin began to show some recovery by refusing to continue trading Below the $4,000 level and sticking to a trade above the $5,000 level.

Consolidated movements are expected to dominate the crypto markets in the coming period, especially in light of the continuing turmoil resulting from the outbreak of the Corona virus.

Many traders believe that Bitcoin will see growth after the upcoming halving event in May, which is likely to push the price of Bitcoin above the $6,500 level.

Mohamed Abdel Khaleq
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