After hovering just below $6500 yesterday (March 22), the bears won the day as BTC price crumbled below $6,000. Bitcoin is trading at $5825.42 at press time and some traders expect further correction as the coronavirus pandemic continues to wreak havoc in Europe and the United States.
Nonetheless, despite the chaos seen in the crypto markets, billionaire Mike Novogratz believes 2020 will be bitcoin’s year.
Expect Volatility To Continue In Coming Months
The past few weeks have been tumultuous for bitcoin and the broader crypto market. Bitcoin plunged 50 percent within hours to $3K levels but recovered circa 77 percent from the bottom as coronavirus fears rampaged through the markets.
Governments worldwide have prepared stimulus packages to compact the economic impact of the novel virus but it seems investors are not fully convinced about these relief packages being able to meet the citizens’ needs. As such, the stock market and bitcoin have resumed a downtrend. Even gold which is considered a safe haven is plunging because its owners are selling it for quick cash.
At the moment, bitcoin is trading just below $6,000. Mike Novogratz expects the roller coaster ride to persist over the coming months. But the intense volatility should not hinder bitcoin from shining this year.
The Macro Backdrop Is Why Bitcoin Was Created: Novogratz
As aforementioned, central banks around the world are printing insane amounts of money to try to cushion their economies against the coronavirus crisis. The breakneck monetary expansion is likely to cause massive inflation and devaluation of fiat currency.
This scenario couldn’t have come at a more perfect time right before bitcoin undergoes halving. After May halving, bitcoin’s inflation rate will drop to around 1.8% annually which is undeniably lower than the target set by the majority of central banks.
Moreover, the situation with the coronavirus has had many stock markets mulling over a possible shutdown. For instance, the New York stock exchange is planning to close its trading floor today (March 23) but resume to all-electronic trading shortly afterward.
As stocks continue nosediving, more stock exchanges could be closed down in the next few weeks, leaving bitcoin the only market standing as it operates 24/7.
According to Novogratz, the macro backdrop is exactly why bitcoin was created. The former Wall Street hedge fund manager noted that this is why he expects 2020 to be bitcoin’s year.
$btc will continue to be volatile over the next few months but the macro backdrop is WHY it was created. This will be and needs to be BTC’s year.— Michael Novogratz (@novogratz)
Traders See BTC Dropping To $4K Lows In The Near-Term
The king of cryptocurrencies has shed circa 7.14 percent of its value over the last 24-hour period. A couple of traders are anticipating a further drop to the $4K zone in the near future.
Cantering Clark predicts that stocks will see another bloodbath this week and bitcoin will follow closely. The trader cited that he is “pretty confident” we will see low $4ks again.
Looking to aggressively add to shorts if re-accepted back into 5800 range composite VAH.
Equities likely to get slaughtered this week.
Bitcoin will follow.— Cantering Clark (@CanteringClark)
Michaël van de Poppe -who goes by the moniker Crypto Michaël- is a full-time trader from Amsterdam and he shares the same opinion as Cantering Clark. He recently observed that the current support at $5,750 and $5,800 looks weak and the next levels to watch out for lie at $4,200 and $4,800.
The crypto market is currently in a tailspin and this could continue in the next few months. But it will bottom out and with the global economy edging towards a recession, bitcoin should shine.