COVID-19 - The major reason for the current fall of Bitcoin

[exstasie]

to OP:
you should try to explain why bitcoin price has been rising for the past 2 days specially when you consider the fact that other markets are still in dumping mode and the situation with COVID-19 is getting even worse with both the number of infected people and number of deaths is setting a new record every day in US. not to mention the total number surpassed 1 million.
if the pandemic had played any "major" role in bitcoin price drop then it should have caused a bigger drop in the past couple of days too.

Most markets are actually still in relief rallying mode. Even crude oil has joined the party, up 41% the past few days. Stocks seem to be bucking the bad news too, posting another 4% gain yesterday. All the bad news seems priced in for now.

All markets are extremely volatile right now because of the March liquidity event. So many sellers were wiped out last month that order books are empty, and many are short now. So it's easy to make price fly. BTC is rising more than other markets because it has even less liquidity. BTC also fell much, much further than most markets so this liquidity/volatility phenomenon is even more pronounced.

It's hard to keep a straight face and say the pandemic had no effect on BTC, especially since it has been tightly correlated with stocks for the past month.

[el kaka22]

All the companies who are not working right now, not all business could be done from home, some business sent people home and make them work remote and that could work but do not forget that there are thousands of people who can't work because their job requires them to be there, all of those business' stopped right now and not working and not making any money at all.

It is vital to think like that because all of those business' can't make any money right now, sure some of them can stay afloat until they get back because they have saved up some money for days like these, but many of them will bankrupt, or they will fire people or they will send people to unpaid leave, all of those equals to economy not having money as much as they used to have.

[Japinat]

It seems to me that for the cryptocurrency market, the imposed quarantine around the world can have a positive effect, since many people who are at home will look for alternative sources of income, where the cryptocurrency market may offer a certain opportunity for generating income. 

Not only crypt, there are a lot of online jobs that pays in fiat, things are just done online.
Crypto should not automatically viewed as an income generator, that is a false assumption because when we say crypto, it should be risk and opportunity.

due to the current situation, an influx of investments into the cryptocurrency market is possible, as well as an increase in the demand for cryptocurrency, as the number of traders can also increase.

As of now, I can't tell that there are really fresh money entering the market because I can't see it on its price and the trading volume is quite normal, same as prior covid-19 was declared as pandemic.

[Febo]

It seems to me that for the cryptocurrency market, the imposed quarantine around the world can have a positive effect, since many people who are at home will look for alternative sources of income, where the cryptocurrency market may offer a certain opportunity for generating income. 

Not only crypt, there are a lot of online jobs that pays in fiat, things are just done online.
Crypto should not automatically viewed as an income generator, that is a false assumption because when we say crypto, it should be risk and opportunity.

Bitcoin is money. A digital one. So it simply helps those people working online to be payed easily and securely. Yes covid-19 lockout situation is an opportunity for Bitcoin. But not the way as Irvinn mention. But as one of teh tools to utilise online work.

[Harlot]

All the companies who are not working right now, not all business could be done from home, some business sent people home and make them work remote and that could work but do not forget that there are thousands of people who can't work because their job requires them to be there, all of those business' stopped right now and not working and not making any money at all.

It is vital to think like that because all of those business' can't make any money right now, sure some of them can stay afloat until they get back because they have saved up some money for days like these, but many of them will bankrupt, or they will fire people or they will send people to unpaid leave, all of those equals to economy not having money as much as they used to have.

And you are assuming that they have liquidated their cryptocurrencies because they don' have any job left? Because if you are, I believe that this assumption is wrong since even before that majority of the lockdowns happened in a lot of countries Bitcoin started to fall before that. USA and some European countries haven't announced there lockdown before the midweek of March and to the 1st week of April and Bitcoin have fell because of that. I'm with the other members here saying that fear in the world caused the drop any nothing else part of any economical reasons. Fear is the only one that can cause a big a fast drop like what we have seen that's why we have FUD as a term here in the crypto market.

[adaseb]

All the companies who are not working right now, not all business could be done from home, some business sent people home and make them work remote and that could work but do not forget that there are thousands of people who can't work because their job requires them to be there, all of those business' stopped right now and not working and not making any money at all.

It is vital to think like that because all of those business' can't make any money right now, sure some of them can stay afloat until they get back because they have saved up some money for days like these, but many of them will bankrupt, or they will fire people or they will send people to unpaid leave, all of those equals to economy not having money as much as they used to have.

And you are assuming that they have liquidated their cryptocurrencies because they don' have any job left? Because if you are, I believe that this assumption is wrong since even before that majority of the lockdowns happened in a lot of countries Bitcoin started to fall before that. USA and some European countries haven't announced there lockdown before the midweek of March and to the 1st week of April and Bitcoin have fell because of that. I'm with the other members here saying that fear in the world caused the drop any nothing else part of any economical reasons. Fear is the only one that can cause a big a fast drop like what we have seen that's why we have FUD as a term here in the crypto market.

A country doesn't need to be in lockdown for people not to go to work. Lockdown was properly done in China where they forced you to stay home and you couldn't leave, it seems to have worked. In some European countries like Italy they had a lockdown but you could leave to go shopping for groceries. In the USA they don't have any type of lockdown what so ever however people are still out of work.

Many businesses like hotels and restaurants get no business , hence people are laid off. Other businesses like bars which aren't essential need to close down. And for some businesses like teachers or teacher aids, they also get laid off because kids don't go to school anymore.  And even the people who still got jobs, they get less business probably and are also struggling due to low demand.

[bitgolden]

I guess the reason why we are getting better right now is the fact that a lot of people have time on their hands and have been dying to check out some bitcoin trading or bitcoin investment but they didn't had the time, now that we are all at home there are a lot more people who didn't had the time and now they have that time so they are actually checking it out.

I am not really entirely sure if that is the sole reason because I am sure there must be some huge whales who didn't want to invest at the bad time who saw the price fall and got back in at the low price but that can't be the sole reason neither. Probably bunch of reasons why bitcoin declined to fall too much and bounced back, there can't be just one reason, there could be multiple reasons why it didn't dropped as much as other investments.

[pooya87]

to OP:
you should try to explain why bitcoin price has been rising for the past 2 days specially when you consider the fact that other markets are still in dumping mode and the situation with COVID-19 is getting even worse with both the number of infected people and number of deaths is setting a new record every day in US. not to mention the total number surpassed 1 million.
if the pandemic had played any "major" role in bitcoin price drop then it should have caused a bigger drop in the past couple of days too.

Most markets are actually still in relief rallying mode. Even crude oil has joined the party, up 41% the past few days. Stocks seem to be bucking the bad news too, posting another 4% gain yesterday. All the bad news seems priced in for now.

All markets are extremely volatile right now because of the March liquidity event. So many sellers were wiped out last month that order books are empty, and many are short now. So it's easy to make price fly. BTC is rising more than other markets because it has even less liquidity. BTC also fell much, much further than most markets so this liquidity/volatility phenomenon is even more pronounced.

It's hard to keep a straight face and say the pandemic had no effect on BTC, especially since it has been tightly correlated with stocks for the past month.

i call it reverse bubble bursts, some may even refer to it as dead cat bounce but i won't call it "relief rallying"
besides the timings don't match. bitcoin reached the bottom in a massive sell off on March 13 and reversed back up in 3 days and has been creeping upwards ever since (80% up). while stocks continued falling during March and have only recently started seeing some small reversals.

i disagree with saying "BTC also fell much, much further", that is just wrong. you are simply ignoring the volatility factor of bitcoin and the fact that a 40-50% drop although scary is not uncommon in bitcoin market but the same size dump in any other market is extremely rare. for example the ~60% drop in crude oil price that you mentioned here is simply outrageous.
i said this in another topic, when you want to compare drops you must put them on a same scale. a 40% drop in stock market is 80% drop in bitcoin, a 60% drop in crude oil is 90% drop in bitcoin. something like that. but if bitcoin dropped smaller or even the same it means bitcoin outperformed all of the other assets.

as for the effects, i still say COVID-19 never had anything to do with bitcoin and it is not the virus pandemic that has caused the drop but the fear and manipulation.

[exstasie]

All markets are extremely volatile right now because of the March liquidity event. So many sellers were wiped out last month that order books are empty, and many are short now. So it's easy to make price fly. BTC is rising more than other markets because it has even less liquidity. BTC also fell much, much further than most markets so this liquidity/volatility phenomenon is even more pronounced.

i disagree with saying "BTC also fell much, much further", that is just wrong. you are simply ignoring the volatility factor of bitcoin and the fact that a 40-50% drop although scary is not uncommon in bitcoin market but the same size dump in any other market is extremely rare.

That was the exact point I was trying to make. BTC is more volatile because it has such low liquidity. That means in a liquidity event, it falls much harder than other assets but also bounces much harder afterwards.

That's why it dropped 63% compared to 36% in the S&P 500, and why BTC is still down much more than stock indices overall.

as for the effects, i still say COVID-19 never had anything to do with bitcoin and it is not the virus pandemic that has caused the drop but the fear and manipulation.

Of course it was fear. That's what took down the stock markets, oil, gold, and everything else on March 12th too. It's crazy to look at the March 12th crash across virtually all assets (including BTC) and say with confidence it had no effect.

[TheGreatPython]

You think bitcoin hasn't recovered as much as the stock world has recovered? Where do you really live? I mean in some nations maybe stock market recovered a lot faster than what crypto did but as widely regarded as the most important one, american stock markets haven't done anything different than crypto did.

Nasdaq 100 was around 8671 a month ago, now 7528, which is still a huge fall tbf, NYSE 100 was around 3039 a month ago or so and right now 2980, tbf not all that much of a drop so thats fine, Dow Jones was around 21406 and right now around 21050 or so which is still a bit of fall and we have bitcoin, that was around 7700ish levels and right now around 6800 levels, a steep fall sure but bigger than everything else? I doubt so, it is closer to what others have done as well.