Traditional financial markets and commodities continue to lose money as the world comes to a standstill. Crypto and Bitcoin markets have recovered somewhat of the losses and it seems that Bitcoin has just “reset” its fair value.
Bitcoin rebounded to regain its near-highs of nearly $ 7000 yesterday before falling back to the $ 6100 area at the time of writing. A number of other top crypto assets also saw a double-digit increase yesterday, including ETH, BCH, Bitcoin SV, EOS, BNB and XTZ.
Stocks and commodities meanwhile remain unchanged or fall as Bitcoin price action begins to detach from them – in the short term.
Do not pump for Bitcoin
The analyst and proponent of the S2F PlanB model commented that 'the system has been destroyed' with all recent BTC liquidations.
#Bitcoin leveraged longs are liquidated, system cleared. Traditional system did not clear because of circuit breakers, bail outs, non 24/7: who knows how many blow ups are out there ?! Markets show current $ 5trillionUSD promised QE is not enough. Bitcoin halving in May. #DoTheMath pic.twitter.com/tdtvLBtwNV
– PlanB (@ 100trillionUSD) March 19, 2020
He added that unlike traditional financial systems, there was no bank bailout for Bitcoin, no circuit breaker tools to prevent further losses like the stock market and no measures. public stimulus to promote the digital economy.
Another analyst added that the upcoming halving will further increase the attractiveness of Bitcoin, while governments will struggle to prevent a complete economic collapse.
“In less than 2 months, the amount of Bitcoin generated every 10 minutes will be cut in half. Meanwhile, the government will have to pump trillions of dollars into traditional markets to postpone a financial crisis. ”
In less than 2 months, the amount of Bitcoin that gets created every 10 minutes will be cut in half
– Rekt Capital (@rektcapital) March 19, 2020
Bitcoin price reset
It is also possible that Bitcoin prices simply just 'reset' their fair market value after pumping 50% in the first few months of the year.
According to a report last year by Charles Edwards of Capriole, BTC was overvalued for years.
Its “fair value” may even be lower than current prices and the next few days will be important for forming new levels of support and resistance after last week's collapse.
Time to do Plan B
The US Federal Reserve has made an announcement to pump more than 1 trillion dollars into the repo market every day at least until the end of March. This move, aimed at helping banks overcome the ongoing crisis, has failed with the cryptocurrency community.
Banks are said to provide US-like collateral to receive cash from the Fed. This liquidity is necessary for short-term operations.
The US central bank began repo operations worth $ 500 billion on March 16 before increasing its combined provided amount to the aforementioned $ 1 trillion.
The Fed has also cut interest rates to almost zero and started the $ 700 billion QE program.
Barry Silbert, CEo Digital Currency Group, seems to be shocked by the fact that the Fed will pump a lot of money into the struggling economy every day, tweeting the hashtag #PlanB.
– Barry Silbert (@barrysilbert) March 20, 2020
Meanwhile, famous Bitcoin supporter Anthony Pompliano predicts that the Fed will not stop there.
Remember when the Fed said they were only doing $ 1 trillion in daily repos for this week?
Many of you said it would be a few days and over. I disagreed.
They just announced they’ll do it through the rest of the month now.
Who wants to bet it doesn’t stop there?
– Pomp 🌪 (@APompliano) March 20, 2020
“Remember when the Fed said they pumped 1 trillion dollars into repos every day this week?
Many say it will only take a few days. I disagree.
They just announced they will do it for the rest of March. ”
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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