That's the view of Alex Krüger, a well-known market analyst on Twitter, who doubts Bicoin's ability as a tool against the global financial crisis. His statement came at a time when BTC prices recorded the biggest day-to-day loss since September 2019, at the same time the stock market witnessed a dramatic collapse.
Krüger noted that Bitcoin's big decline could come at any time when global market sentiment is worsening. He expressed doubts that major traders could augment the next breakdown for Bitcoin, saying that they could liquidate their positions, sell in panic or transfer money into other assets.
“The current context could see Bitcoin drop another 20% in an hour,” Krüger said. “It can come at any time, when the big whales panic or decide to liquidate positions to make margin calls or hunt bargains in other types of assets. No past analysis will detect this. ”
$ BTC in this environment can drop 20% in an hour. It could come out of nowhere, as large whales panic or decide to liquidate positions to cover margin calls or hunt for bargains in other asset classes. No analysis of the past will uncover this.
– Alex Krüger (@krugermacro) March 9, 2020
A painful failure
Krüger's concern about the long-term decline in the Bitcoin market is based on signals from its high correlation with the stock market. Therefore, the sell-off in the market led by the corona virus has led to more painful outcomes for Bitcoin than global indices.
For example, as of February, the king's coin has dropped more than 26% from its peak in 2020. At the same time, the S&P 500 has dropped by 15.84% against the fundamentals of the corona virus. Even the latest oil price war in Saudi Arabia has collapsed Bitcoin more than FTSE 100, FTSE MIB and Nikkei stock indices.
“That's another reason why Bitcoin is NOT a good hedge against risk assets in the risk-off story,” Famous economist Nouriel Roubini said. “It has actually fallen more sharply than risk assets in risk-offs. Therefore, BTC is a 'shitcoin fence' in risk-off cases. ”
Meanwhile, Gold – Bitcoin's main rival, has closed above $ 1,700 for the first time in 7 years, suggesting it is a better safe haven against ongoing financial instability.
Global mkts in PANIC mode: Oil prices crashed, equities plunged, currencies & bonds saw wild moves as a full-blown price war in crude adds to coronavirus worries. Nikkei dow almost 6%. US 10y yields pic.twitter.com/0ExP3bIVFw
– Holger Zschaepitz (@Schuldensuehner) March 9, 2020
Bullish expectations for Bitcoin
Although the prospect of a Bitcoin price cut is clearer than ever, there are still many traders and analysts who are optimistic. And one of them is PlanB – the father of the exact model of Bitcoin price prediction in Stock-to-Flow history. In a tweet on March 8, he confirmed that the price of Bitcoin was on track with a proposal by Stock-to-Flow, which was calling for $ 100,000 in 2021.
“The S2bit #bitcoin chart is corrected for today's 'incident' … nothing happened, BTC is on the right track with S2F.”
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