Bitcoin [BTC] price closed at $7725 on a weekly scale. Nevertheless, the volatility in the short term has been considerably high with positions liquidating on both sides.
The funding rate on BitMEX is still negative which suggests that the majority of traders are positioned short. On Huobi as well, negative BTC Basis indicated a bearish bias. Similarly, the BTC basis on Okex is negative as well. Therefore, despite the move to the upside, the scepticism among traders still sees a bearish penchant.
All is Not Well
The coronavirus scare crash that occurred on 12-13th March has seen a swift recovery in the past six weeks. In the US, quick recovery in the stock markets due to the quantitative easing stimulus has been consistent.
The V-shaped recovery moved above the 50% retracement level since the fall. Nevertheless, the overall economic outlook is one of recession. The ‘black swan’ event that began with the crisis has continued to baffle the traders across all markets. Financial and crypto analyst, Mati Greenspan, tweeted,
Can’t have a V-shaped recovery if people are earning more from unemployment benefits than they would by working.
Since the correlation with the stock markets has been strong since the crisis, it has continued to affect crypto traders as well. Peter Schiff, a CEO at Europac and a gold buff tweeted on the possibility of a drop in the crisis. The top 5 companies of the S&P 500 has more than 20% share w.r.t. total market capitalization. He said,
I saw this chart in an article on Zero Hedge. If a picture is worth a thousand words, this one is worth trillions. The 2000 bubble didn’t end well and the 2020 bubble will end even worse!
The technology space is leading the markets. Nevertheless, it suggests that other businesses are shrinking in value. Moreover, a downfall in the leading stocks will set likey set the precedence for the other risk assets as well, as it did with the dot com bubble in the late 1990s.
Do you think that bullish continuation is likely in stock markets and crypto markets, or will decoupling begin? Please share your views with us.