Crypto News

Virus worries waves through crypto markets as Bitcoin busts below $30K

  • Bitcoin breaks the $30K price support.
  • The delta variant causes a market dip.
  • The March-2020 scenario may repeat.

YEREVAN (CoinChapter.com) — Bitcoin (BTC) prices have broken the support of $30,000. And now, analysts debate around crypto-predictions amid the Delta variant breakout.

BTC loses momentum breaking the $30K support. Source: TradingView.com
BTC loses momentum, breaking the $30K support. Source: TradingView.com

After hovering above the support line for weeks, Bitcoin touched $29,508 for the first time since June 2021. That marked a 6% price decline in the previous 24 hours, matching steps with limited but similar price drops across other cryptocurrencies and the global stock market.

For instance, the second-largest crypto Ether slipped by roughly 7%, while XRP and Dogecoin dipped 9%. The Wall Street Indexes—the S&P 500, the Dow Jones, and the Nasdaq Composite—also fell to their multi-week lows, with analysts blaming the concerns around the highly transmissible Delta variant of COVID-19 behind the panic-sell. 

The COVID cycle hits Bitcoin again

In February 2020, when COVID-19 first broke out on a large scale, the Bitcoin price underwent a massive matter of days. The cryptocurrency’s prices plunged from the Q1/2020 peak of $10,522 to as low as $3,858 on the Coinbase exchange. Nevertheless, the prices rebounded sharply in the wake of the Federal Reserve’s defensive economic policies, including near-zero interest rates and an unlimited bond-buying program.

Loose monetary rules allowed Bitcoin to rise above $65,000 as of April 2021. Meanwhile, the breakout of the Delta variant can have a similar effect on the Bitcoin market, hinted Civic Key’s CEO Vinny Lingham.

Multiple indicators suggest that Bitcoin is repeating its March-2020 cycle, which implies short term breakdown followed by an abrupt reversal. The market watchers are on their toes as the pre-breakdown stage persists.

Breaking the support of $30,000 was an important milestone as it may have created a panic sell-off to later result in much lower support. However, these would be short-term speculative investors responding to fluctuations quickly and impactfully. 

Accumulation persists among strong-holders

Miners, entities that produce Bitcoin for circulation through an extensive computational process, have started accumulating their freshly-minted tokens.

Related: Bitcoin is not going above $40K this year, says Singapore exchange head.

The position is a sign of long-term HODLing and accumulation. Moreover, it seems to be the winning strategy among miners. The HODLers now hold 75% of the digital asset supply, with the overwhelming majority at a profit, Glassnode analysis shows. 

Nevertheless, the overall market activity is decreasing. Bitcoin’s relative trading volume is at its two-year low. As a result, the Momentum Oscillator has pivoted from the zero baselines and will likely continue the downward movement. 

Related: A March 2020-like Bitcoin bounce underway, analyst asserts

At some point, digital gold was considered a haven for investors when the traditional market was struggling. However, the market indices are plummeting, according to the analysis of CNN Business. S&P is down by 1.6%, DJI by 2.1%, and other significant indices globally follow the same pattern. Conversely, as the chart shows, the US dollar continues strengthening, creating further downside pressure on Bitcoin.

Market indices and Bitcoin decreasing, as USD ETF's strengthen. SourceTradingView.com
Market indices and Bitcoin decreasing, as USD ETF’s strengthen. SourceTradingView.com

In the words of economist Peter Schiff, investors did not opt to land their capital in the Bitcoin markets against the latest market downturn. On the other hand, they remained invested in gold, a traditional safe-haven asset.

“Today as risk assets tanked investors took shelter in their safe haven of choice,” he tweeted Monday. “The Japanese yen, Swiss franc, U.S. dollar, Treasuries, and #gold all traded higher on the day. You will notice that investors didn’t seek refuge in Bitcoin, as it’s a risk asset, not a safe haven!”

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