The coronavirus outbreak and the war forming in the crude oil sector managed to impact cryptocurrencies. The recent oil war may have caused the wipe-off of 15% of the total market capitalization in the crypto sector.
Bitcoin, the world’s leading cryptocurrency, seems to have taken the impact severely, after a week of price consolidation. The world’s #1 crypto plunged down, losing over $1,000 over the course of the past 24 hours alone. Weekly, the top crypto collapsed from $9,167.70 to trade at $7,812.49 as of press time.
Bitcoin initially started falling on Friday, March 6, but the weekend rally mitigated the consequences of the downward push. Despite the $9,192 high on Saturday, the bulls bent under the resistance, and Bitcoin started its rollercoaster start of the week.
Bitcoin’s fall to serve as a safe-haven for investors took the entire crypto sector down, with some of the top-10 cryptocurrencies recording double-digit losses. Ethereum (ETH), for example, is down 10,43% to trade at $203,29 as of press time. Ripple (XRP) recorded an 8% price decrease, touching the psychological barrier of $0,20, selling at $0,208826.
Bitcoin Cash (BCH) lost 13 percent of its price, to currently trade at $273.3, while the only gainer in the top-20 is LEO with a mere two-percent price increase. Trading volumes, however, are increasing, indicating stability and possible price increase in the following days.
The primary cause for the crypto market plunge remains unclear. However, some crypto experts believe the price drop has some kind of correlation to the more significant stock market turmoil, which caused market havoc.
The primary catalyst, according to the experts, is the tension between Saudi Arabia and Russia, after both parties failed to come to a consensus about reducing crude oil productions. Đ¢his is happening to act against weaker oil demand as a result of the nCoV-19 outbreak. Shortly after Saudi Arabia’s decision to keep the current levels of oil production, major U.S. indexes like Dow and S&P 500 took a 5% hit.
The recent price Bitcoin price fluctuations broke the arguments of crypto enthusiasts for Bitcoin becoming a safe-haven asset, like physical gold. Nouriel Roubini, who is a Nobel prize laureate in the field of economics, commented on the latest crypto price downfalls.
“Bitcoin fell 8% in just a day, which is much more than indexes and company stocks, which defines Bitcoin as a not-so-good safe-haven asset”, Roubini stated.
Jehan Chu, a managing partner for Kenetic Capital, also commented on Bitcoin’s price slump. “The big forces are collapsing, which leads to massive Bitcoin sell-offs. Bitcoin, as well as the entire sector, is no stranger to volatile behavior, but this price slump is nothing we haven’t seen before”, Chu added.
Bitcoin now tends to move in conjunction with the rest of the market, as the community saw in the war conflict between the Iranian government and the U.S. army.