The ‘Trump effect’ failed to boost investor confidence in traditional markets today, however it did provide some temporary relief for Bitcoin. The lead crypto enjoyed a ‘nice bounce’ to the $7500 region but quickly went on to shed $1300 rapidly in the space of a few hours.
Bitcoin Bounced on the ‘Trump Effect’
Following U.S. President Donald Trump’s second-ever Oval office address in response to the coronavirus, the markets promptly plummeted.
The Dow Jones Industrial Average closed Wednesday 20% below its February high. The Blue-chip stock index plunged more than 1,400 points, officially ending its 11-year bull run and pushing it into a bear market.
It seems that the president’s attempts to soothe a concerned nation failed to bolster investor confidence. The billions of dollars in tax relief and plans to support businesses with low-interest loans and create “$200bn of extra liquidity” went down like a led balloon.
Still, the promise of printing trillions of dollars to pay social security benefits and sick pay temporarily worked in Bitcoin’s favor.
Blockroots co-founder and crypto trader, Josh Rager, pointed out that the ‘Trump effect’ had given Bitcoin a “nice bounce in the $7500s.” However, he pointed out that it looked likely that it would be short-lived. If only he had a crystal ball.
The Trump effect is taking place on the market after his news conference
Bitcoin had a nice bounce in the $7500s, but it’s very likely price makes it way down to the $7200s-$7300s before another hard bounce
I have bids staggered from the $7300s down to $7100s pic.twitter.com/wFcoIW6Iwc
— Josh Rager 📈 (@Josh_Rager) March 12, 2020
BTC Now Down 15.29% YTD
At the time of tweeting, Rager stated that it was “unlikely” the price would fall to as low as $7200-7300. If it fell below $7200, it would wipe out all gains made year-to-date. Who could have known that less than 24 hours later, the number-one cryptocurrency that started 2020 with incredible momentum, would be registering YTD losses of more than 15%?
As BTC pierced the $10k threshold earlier this year, top analysts confirmed that Bitcoin was back in a bull market calling for end-of-year prices of $40K. Some extreme optimists even said its price would be worth as much as $400k in the near future.
Yet, all that looks decidedly uncertain as we plunge into a new bear market.
The cryptocurrency markets are more correlated to the stock markets than we thought. And as the coronavirus is officially deemed a pandemic by the WHO it seems that for the short-term at least, there are no safe havens to be found.
Do you think Bitcoin will slump below $6K or break back over $7K soon? Add your thoughts below!
Images via Shutterstock